Lacky Mortgage

If you're considering purchasing a high-value home in the United States, you'll most likely need to secure a jumbo mortgage. With interest rates close to their all-time lows, now could be the best time to find a jumbo home loan if you are considering refinancing your existing mortgage. Take a look at these frequently-asked questions to familiarize yourself with these special types of home loans.

1. What is a jumbo mortgage?

Jumbo mortgages are special types of home financing instruments that are designed for high-value properties. Conventional loans have limits, so homes that are purchased at an amount higher than those limits requires special financing. The loan limits are set by the Federal Housing Finance Agency (FHFA).

2. What type of interest rates do jumbo loans have?

Depending on the market, and your own financial status, jumbo loans typically have a slightly higher interest rate than conventional loans. Jumbo loans are not sold to Fannie Mae and Freddie Mac in the secondary markets which limits lenders' abilities to quickly sell these mortgages.

3. What is the conventional loan limit?

Conventional loan limits will vary by location, property and can be higher in areas with higher home values.

In 2010, the conventional loan limit for a one-unit property was $417,000 for the continental U.S. ($729,750 for higher-cost areas) and $625,000 for Alaska and Hawaii ($938,250 for higher-cost areas). The loan limits for single family homes may vary from that of multi-family units.

Check with a real estate or mortgage professional who is familiar with your area to learn more.

4. What are the different types of jumbo loans?

There are several loan programs that fall under the jumbo loan umbrella. They can have fixed or adjustable rates. Most fixed rate jumbo loan programs are for either 30 or 15 years. The most popular adjustable rate jumbo loan programs are 5/1 and 7/1 ARMs. There are also adjustable rate mortgage programs that have introductory rates for 3 years and 10 years.

5. What kind of credit score do I need to qualify for a jumbo loan?

These numbers can vary by lending company, but a minimum score of 620 is usually needed for a full-documentation loan and a minimum score of 680 is often required for an interest-only jumbo loan.

For more information on jumbo financing, speak with a licensed mortgage professional serving your community. There are plenty of sites out there such as Bankrate.com and BurlingtonMortgage.biz where you can compare interest rates from competing lenders, brokers, and banks serving your state.
Source:  http://www.articlesbase.com/mortgage-articles/understanding-jumbo-mortgage-financing-5777369.html