In the current high-cost housing market, jumbo loans, traditionally associated with luxury real estate, are now becoming commonplace even for average homes in competitive cities. These mortgages exceed the conforming loan limits defined by the Federal Housing Finance Agency, which in 2025 is $766,550 in most areas and higher in expensive regions. However, because they are classified as non-conforming, they carry stricter approval standards and less protection for borrowers, making it essential for prospective buyers to understand the implications of securing a jumbo loan.
In today's high-cost housing market, even modest homes in competitive metros may require jumbo loans, which come with stricter standards and increased risks.
Jumbo loans surpass conforming loan limits set by the government, leading to tougher approval criteria and less consumer protections compared to conventional loans.
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