Jumbo Mortgage Loans

Jumbo Mortgage Loans those above the Conforming Limit. Jumbo Mortgage Loans above $417,000 fall into several categories:

Jumbo Mortgage Loans Fixed Rate- Term is for 15 or 30 years although it is common to set another jumbo mortgage loans term such as 40 years. Interest rate will not change for the life of the jumbo mortgage.
Jumbo Mortgage Loans ARMs- Adjustable Rate Mortgages are mortgage loans with a fixed rate for a time period usually 1, 3, 5, 7, or 10 years followed by an annual interest rate adjustment. Jumbo mortgage ARMS 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 Weekly Index. If your jumbo mortgage loans 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 jumbo mortgage 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 jumbo mortgage 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.

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Jumbo Mortgage Loans vs Conforming Mortgage Loans

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 mortgage 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 common strategy to lower overall interest costs if your purchase or refinance balance is above $417,000 is to use a combination of both first and second trust or home equity line of credit, referred to as an 80/10/10 Jumbo Mortgage Loans or 80/15/5 Jumbo Mortgage Loans. Every situation is different, but it is one more option to consider.

Many clients are converting from fully amortizing payments to an interest only approach with a significantly lower monthly payment. I have some extensive information available.

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 No Doc Jumbo Mortgage Loans page.

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

I have a page on jumbo mortgage loans documentation requirements.