We know that the amount of a Jumbo loan is larger than conforming loans. Here are some key reasons for how else they differ:
The fees and costs at the closing of a Jumbo loan require additional steps for qualification compared to conforming loans because of the amount.
Conforming loans have a limit of $ 647,200 in most counties and $ 970,800 in more expensive counties, while the amount you can borrow for a Jumbo loan is more open-ended.
Interest rates for Jumbo loans are typically higher compared to conforming loans due to the larger amount and risks involved. However, it’s possible to secure a rate for a Jumbo loan that is on par with a conforming loan by shopping around and comparing rates.
For conforming loans, down payments are generally more affordable. You can choose from percentages as low as 3% of the value of the assessed sale price of the home. Down payments for Jumbo loans can start at a minimum of 10% of the property sale price, while 20% down is the most common. Note: if you put less than 20% down, you are required to have Private Mortgage Insurance (PMI)