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Jumbo Mortgage Loan helps Families in Getting Cheaper Home Loans

• If you’re thinking about jumbo mortgage loans then educating yourself with various options available is the best decision that you have made. A jumbo mortgage is a home loan that exceeds a certain amount. Loans above the maximum loan amount established by Fannie Mae and Freddie Mac are known as ‘jumbo’ loans. • These types of loans are bought and sold at a smaller scale that’s why they have a higher interest rate than the norm. The loan size limit is based on the original principal amount of the loan and has nothing to do with the sale price of the property. Any loan exceeding this limit will not be purchased by Fannie and Freddie and is termed as jumbo.


• A jumbo loan is a loan that is larger than the limit set up by the Federal National Mortgage Association. The limits for each state vary, but getting a jumbo loan is the same as getting a confirmation loan, just the interest is higher.


• At present, loan limit for a mortgage in United States is $417,000. The housing and Economic recovery Act of 2008 expanded the definition of a conforming loan and raised the loan limits for highcost areas of the country. FNMA’s current high-cost loan limit is $625,500. • The limit is also higher for loans on properties in Alaska, Guam, Hawaii and U.S. Virgin Islands. For these areas, general limit is $625,500 and high-cost area limit is $938,250. In order to qualify, lenders require at least a 20 percent down payment from the jumbo loan borrower. • Borrowers must go through an extensive underwriting process. Lenders verify borrower’s monthly incomes.


• Jumbo home loans are considered riskier than confirming loans. If you notice jumbo home loans are set up for properties that are hard to sell such as luxury homes. Lenders charge high interest rates and demand high down payment from jumbo borrowers. • Interest rates for jumbo loans can cost an additional 0.25% to 0.50% or more over confirming rates, based on the current market pricing of risk. Jumbo borrowers may be asked to perform additional steps in the home purchase process, such as getting two appraisals on the property.


• Jumbo mortgages have several advantages. First, it is easy to refinance/modify the loan which is a positive sign. If you deal with one financial institution you can modify the loan easily. • Every bank has a different policy and responds to consumers in a different manner. • Getting the first loan is not that difficult. But if you want a second loan from another bank it may be difficult to make a refinance.


• Second, one bank facilitates a much easier short sale process. Short selling has been the predominant method of housing sales in many communities. Adding a second bank offers a second opportunity for rejection and worse, pits the two financial institutions in competition for the same dollars.


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Jumbo mortgage loan helps families in getting cheaper home loans  

If you’re thinking about jumbo mortgage loans then educating yourself with various options available is the best decision that you have made...

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