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Jumbo Mortgages

The Loan Balance for Jumbo Loans are Above the Maximum
loan amounts established by Fannie Mae and Freddie Mac — thus jumbos are "non-conforming" loans. The interest rates on jumbo loans are generally higher than rates on conforming loans.
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Advantages and Disadvantages

about jumbos

Jumbo Loans are Non-Conforming Loans
conforming loans are conventional loans that meet terms and conditions set forth by Fannie Mae and Freddie Mac. Jumbo loans are used to finance high-expensive homes.

  • These two stock-holding companies purchase mortgage loans from lending institutions and secure them for resale to the investment community.

  • Fannie Mae and Freddie Mac establish maximum loan amounts, income requirements, down payment requirements, and type of suitable properties. Loans that do not conform to these guidelines are referred to as non-conforming loans.

    view sample loan limits: http://www.fanniemae.com/
advantages
  • homeowners are looking to finance a home that is above the loan limits set by Fannie Mae / Freddie Mac
  • most jumbos allow borrowers to select the type of mortgage loan — fixed, ARM, hybrid
disadvantages
  • the APR is generally higher than other conforming loans
  • The fixed rate can range anywhere from 0.11 to 0.77 points higher, depending on the region
  • Adjustable rates are 0.01 points higher, but tend to narrow as the ARM adjusts. Many of the jumbo mortgage loans are ARMs.
money saving tip
  • consider placing more down payment to bring the jumbo loan closer to the upper loan limits on conforming loans
  • if you can afford the monthly payment on a 15-year loan, you will pay substantially less money than on the 30-year loan — plus your home will be paid off in half the time — see calculation

  • you can start with a "non-conforming" jumbo mortgage and use our mortgage payoff plan to help pay down your mortgage quickly

    see how the mortgage payoff plan works
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