Yes. A big disadvantage to the jumbo loan is that even a slightly higher interest rate over a conforming loan is magnified because of the large amount of money being borrowed. There is a way around this if you need a loan slightly higher than the maximum conforming limits. Many lenders now offer a conforming loan for the maximum allowed and a second mortgage loan for the balance needed. Since you are saving interest on the higher-amount first mortgage, you can afford to pay a higher rate on the second and still come out ahead.

Example: Since conforming loan maximums change with the real estate market and region, suppose $450,000 is the conforming loan limit. You need to borrow $460,000. Instead of paying the higher interest of a jumbo loan, you get a second loan for $10,000. Since the higher interest of the jumbo loan would be paid on $460,000, the savings are considerable. You could pay over 15% interest on the second (although you should not have to) and still come out ahead, using a difference between the rates of a jumbo and conforming loan of only

.25%, with interest on the conforming loan at 7%.