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Jumbo Loans

For You?

What Are Jumbo Loans?
Jumbo loans are defined as mortgages larger than the limits set by Fannie Mae and Freddie Mac
($275,000 this year; $379,050 in Alaska and Hawaii) Jumbo loans cannot be funded by these two agencies and they usually carry a higher interest compared to other loans.

Should I Acquire A Jumbo Loan?
The question as to whether a jumbo loan is for you has to do primarily with the amount needed and the ability to pay higher rates. Other issues include weighing your options between paying off the home equity loan in a shorter period of time as opposed to paying a consolidated first and second mortgage, often resulting in a jumbo loan with higher interest rates.

Are Jumbo Loans More Expensive?
Still there is the issue of payment amounts. If one were to take out a home equity loan rather than a jumbo loan (consolidating 1st and 2nd mortgages.), would the payment installments likely be higher or lower?

Whenever you borrow more than 80 percent of your home's value on a first mortgage, expect the lender to require private mortgage insurance (PMI). If the homeowner has no equity in their home lenders will likely apply a higher interest rate and with that higher PMI premiums to offset the credit risk.

How Can I Make A Jumbo Loan More Affordable?
To save both in installments and interest rates it's best to keep the loan amount as reasonably low as you can manage between the conventional/jumbo threshold.

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