Jumbo vs conventional loans: What’s the difference?

Technically, a jumbo loan is a type of conventional loan — which is simply a mortgage that’s not backed by the government, but originated, financed and guaranteed entirely through a private lender. However, most folks thing of conventional loans as standard mortgages, and that a jumbo loan is not.

A jumbo loan is a kind of mortgage that allows a borrower to take out a large amount of cash and buy a home that is more expensive than the norm — or an amount that exceeds conforming loan limits, as they say in the home-financing biz.

Let’s look at this standard, and other ways jumbo loans differ from most conventional loans.