The
interest rate on our Jumbo Mortgages are nearly as low
as our conventional Mortgages. Another way to get the
best rate is to consider an Adjustable Rate Jumbo Mortgage.
These are frequently much lower, depending on short
term rates. Jumbo Mortgages are our specialty!
Home
loans are classified in a wide variety of ways. They
can be classified by the amount loaned, whether the
interest rate can be adjusted or not, the length of
the payback period and so on. A fairly common and simple
term to understand is the jumbo loan.
A
jumbo loan, is a loan that exceeds the maximum dollar
amount guidelines set by FANNIE MAE, for a single family
loan limit. Effective January 1st, 2005, this limit
is $359,650 in all states except AK and HI. The limit
is $539,475 in AK and HI. Most lenders use the Fannie
may guide when underwriting loans over these set limits.
A
jumbo loan is simply a mortgage in excess of the amounts
set by government backed agencies that buy or guarantee
loans. Companies such as Freddie Mac, Fannie Mae, HUD,
etc. will guarantee the purchase of a loan from a lender
if certain conditions are met. A discussion of those
conditions is beyond this article, but one of them is
the amount being borrowed. Depending on the agency in
question. If the amount you are borrowing is less than
this amount, then it is known as a conforming loan.
If you need to borrow more, the loan is known as a non-conforming
loan or “jumbo” loan.
Given
the higher risk from the perspective of the lender,
you can expect to be treated a bit differently. In this
case, lenders are going to charge higher interest rates
than you would be able to get with a conforming loan.
Before you panic, keep in mind we are talking about
a quarter of a point in interest. For example, a conforming
loan for $300,000 may have an interest rate of 5.5 percent
whereas the same borrower will have to pay 5.75 percent
if they borrow $800,000
A
Jumbo Mortgage is a mortgage with a loan amount above
conventional loan limits. Jumbo Mortgages apply when
agency (FNMA and FHLMC) limits don't cover the full
loan amount. Fannie Mae (FNMA) and Freddie Mac (FHLMC)
are large agencies that purchase the bulk of residential
mortgages in the U.S. They set a limit on the maximum
dollar value of any mortgage which they will purchase
from an individual lender. Currently, this limit is
$322,700. This leaves a portion of the market to look
elsewhere for placement. Other large investors, such
as insurance companies and banks, step in to fill the
need with maximum mortgage amounts going to the one
million or two million dollar range. The average interest
rates are typically greater than normal for conforming
mortgages, and vary depending on property types and
mortgage amount.
