I've worked with plenty of high-end buyers who go the jumbo route. Not because they have no choice, but because it keeps their liquidity intact. If you're looking at a non-conforming loan, it's not about good or bad but rather about what gives you leverage. In some cases, putting more down just to fit into a conforming box can backfire. If the monthly payment and terms work in your favor, jumbo loans can be the more strategic play, especially when the rate gap has narrowed.

Non-conforming loans such as jumbo loans are not necessarily bad, they are however more risky. These loans are in excess of Fannie Mae and Freddie Mac limits and in most cases their underwriting criteria are tighter. Although the rates can be comparable to the conforming loans, jumbo loans are more difficult to qualify and have fewer protections. To existing customers, I would recommend getting a conforming loan where possible because it usually has better terms and cheaper long-term payments. You could be financially better off as long as you can make a higher down payment to remain within the limits of the conforming loans. Nevertheless, when a bigger house requires a jumbo loan, make sure that you are satisfied with the payment terms and conditions.

The so called bad loans are not bad they are different. They are supposed to be used in protecting cases where a borrower will not heed the directions which have been set by Fannie Mae or Freddie Mac either because the loan is too large or because of the credit history or because of the income verification. The jumbo loan is the possible loan that people have to finance a house, and go to the neighborhoods where they want to stay in California, where there is a home price level presently higher than the median price of 900,000 dollars (C.A.R. data). I have seen many many investors and buyers in my life and some of them had great credit and others had strange income like those owning or doing business or self-employed workers. The non conforming loans have assisted them to put an end to finishing off in a fast and competitive mode. Today the rates are shockingly near conforming rates particularly in the case of good borrowers. Therefore, when you shop in a sellers market and end up acquiring a jumbo loan, you may end up going through the bother of accessing your liquidity as a higher down-payment. In one word: labels are not sought. Put in mind what would suit your long term plan, your budget, how much money you can offer at that specific moment and what can land you into the house of your dream without sweating a drop.