What to Expect From a Jumbo Mortgage Loan

By: 1st American mortgage

What to Expect From a Jumbo Mortgage Loan

Jumbo mortgages are not so different from standard mortgages but there are a few key things that are worth looking in to.

Jumbo Mortgage Loans

A jumbo mortgage loan is one taken for a top-dollar property. In Colorado, as in most of the U.S., a jumbo mortgage loan is any mortgage that exceeds $417,000 - the limit set by Fannie Mae and Freddie Mac for conforming loans.

Fannie Mae and Freddie Mac, the two agencies that buy the majority of real estate mortgages, are exceptions). Therefore, the large jumbo mortgage loans are sold to other investments, often banks and insurance companies, and so a jumbomortgage loan falls into a different category. Rates for a jumbo mortgage are also higher than conforming loans because there is more risk involved.

Jumbo Mortgage Interest

The size of a jumbo mortgage loan means there is more to lose. Both the size, together with other factors, result in a higher rate over those granted for conforming loans. And since a small percentage of a point on jumbo mortgage rates translates into a sizable payment difference, buyers should shop around for a good lender when applying for a jumbo mortgage loan in order to find the best rate. buyers need to shop for good lenders when applying for a jumbo mortgage loan to get the best jumbo mortgage interest rate.

In reality, rates are only one you should factor in when shopping for a jumbo mortgage loan. There are additional fees and closing costs to be considered that could even out the difference in jumbo mortgage rates. Sometimes, the company with the higher jumbo mortgage rates is actually the cheapest, all things considered.

It's also important that buyers think about their goals, plans for the future, and other options. Similar to more traditional mortgages, a jumbo mortgage loan is offered as different product sets. Buyers can choose from loans with adjustable rates- with three or five year locked rates that will adjust after the selected period, or fixed fates at 15 or 30 year terms.

Choosing the right product for your situation, either a variable or fixed jumbo mortgage interest rate, will depend on how long you plan to stay in the home or if you plan to refinance sooner rather than later.

Buyers should not be scared off from higher jumbo mortgage rates;jumbo mortgage rates are higher only by a quarter of a point or so for well qualified buyers. What’s more, jumbo mortgages are the only option for home buyers in many parts of the country because $417,000 really isn’t that high a price in today’s housing market. In fact, jumbo mortgages are the only loans available in many areas. The best way to find a good jumbo mortgage loan is the find a reputable and experienced lender with good rates. A good lender will take the time to work with you to understand your goals so they can help you choose the best product.

This article is written by J.B. of 1st American Mortgage and Loan, LLC, a Colorado mortgage lender who offers access to information on obtaining a Colorado mortgage loan as well as other information on loans in Colorado, online mortgage quotes, and rates through his website TrueMortgageQuote.com

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This article is written by J.B. of 1st American Mortgage and Loan, LLC, a Colorado mortgage lender who offers access to information on obtaining a Colorado mortgage loan as well as other information on loans in Colorado, online mortgage quotes, and rates through his website TrueMortgageQuote.com