Conforming or Jumbo?
Conforming refers to loans up to a federally set limit. Loans above that amount
are considered Jumbo loans. For most people, the amount of the loan
they are seeking is already determined by the amount of down payment
they can afford and the sale price of the home (or existing loan
balance in the case of a refinance).
Those borrowers whose proposed loan amount is near the
federally set limit, or those who have significant flexibility in
determining their down payment, should consider keeping their loan
balance below this limit so that they may secure a Conforming loan.
Conforming loans are most often (though not for all lenders) offered at
lower rates than their Jumbo counterpart.
Ultimately, your potential lender will be your greatest
source of answers and advice. Be sure to ask a lot of questions and ask
for clarification if there is anything you don't understand
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