Interest Only Super Jumbo Mortgage

Interest only super jumbo mortgage products are those above $650,000 and have an interest only payment feature reducing your payment. Super jumbo mortgage products fall into several categories:

Fixed rate, interest only super jumbo mortgage- Term is for 30 or 40 years although it is common to set another term. Interest rate will not change for the life of the mortgage.
ARMs- Adjustable rate interest only super jumbo mortgage products are loans with a fixed rate for a time period usually 1, 3, 5, 7, or 10 years followed by an annual interest rate adjustment. They are usually expressed as 1/1, 3/1, 5/1, etc. Following the initial fixed period, the new rate is determined by adding a margin to an index. For example, a common index is the 1 year Treasury Index. If your ARM has a margin of 2.750 (margins can vary from 2.500 to 3.000 depending on lender and product) and the index was at 5.33 your new rate will be 8.080%. ARMS, like balloons, can be a viable option if you select a term appropriate for your plans. Also, I have several clients who have adopted a strategy where they determined that the low rate associated with a 1 year ARM saves them more money than the cost of an annual refinance. It may be worth looking at to see if it works for you. The Cash Flow Super Jumbo Mortgage is another very viable option when looking at an interest only super jumbo mortgage. Interest only super jumbo mortgage products are readily available as well

Conforming vs. Jumbo vs. Super Jumbo Mortgage

The conforming limit is a mortgage amount set by Congress and is the maximum loan size eligible for purchase by either Fannie Mae or Freddie Mac, two Federally chartered organizations who purchase the underlying securities from mortgage originators. Those funds are reinvested in new mortgages completing the flow of funds cycle.

The current conforming limit is set at $417,000. Any loan amount above that figure is considered a Jumbo loan and is often subject to an interest rate pricing premium as well as to some additional underwriting restrictions. A Super Jumbo Mortgage is one above $650,000 and while they do require a small pricing adjustment, commonly they will require a greater equity stake in the property. A common strategy to lower overall interest costs if your purchase or refinance balance is above either limit is to use a combination of both first and second trust or HELOC money, referred to as an 80/10/10 or 80/15/5. Every situation is different, but it is one more option to consider.

Many of my clients in the super jumbo mortgage market are converting from fully amortizing payments to an interest only mortgage approach with a significantly lower monthly payment. I have some extensive information available. Read more to see if this powerful tool could work for you.

We offer you the ability to qualify and close into several unique programs which accommodate borrowers with non traditional income or asset situations. Please visit my Interest Only Super Jumbo No Doc Mortgage page.

I have a page on how to calculate your qualification ratios.

I have a page on documentation requirements.

As a Certified Mortgage Planning Specialist, I offer an analysis of your situation today can make suggestions on how small changes in how your debt is structured today can have a life changing effect in the years to come. Read more about this free, no obligation service.

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