Jumbo Mortgage Loans

As you would expect, a jumbo loan is a loan for a large amount of money. A loan is considered a jumbo if it exceeds the maximum amount of the Fannie Mae and Freddie Mac programs. Because these loans do not conform to the Fannie Mae and Freddie Mac guidelines jumbo loans are said to be nonconforming loans.

The is no standard amount set for a loan to be classified as a jumbo because Fannie Mae and Freddie Mac adjust their maximums yearly based on changes in real estate prices. For 2006 the highest amount a conforming loan can be for a single family house is $417,000. Anything above this amount would be considered a jumbo. This amount will change annually as real estate prices rise and fall.

Just like smaller loans, there are many different types of jumbo loans. There are fixed-rate, adjustable and hybrid jumbos. The loan-to-value (LTV) ratio can be as high as 100%. The terms can be the same as smaller loans, with fifteen and thirty year amortizations being the most common. Jumbo loans can be used to purchase or refinance a property, whether it is a primary residence, vacation home, or vacation property.

As with smaller loans, the strength of the borrower will determine the interest rate. For equally qualified borrowers a jumbo will have a higher rate than a conforming loan. The rate on the jumbo will typically be .125% to .75% higher, depending on the details of the loan and the borrower.

For more information, or to apply for a Jumbo Mortgage Loan visit one of my websites at www.YourJumboLoan.com, www.rochester-mortgages.com or => www.MisterRefinance.com.

David Farrands is a mortgage specialist working from Rochester, NY arranging loans throughout the country. For more mortgage information you can call him toll free at 1-800-807-0025 ext 227.

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