subject: A Jumbo Mortgage Loan [print this page] A Jumbo Mortgage Loan A Jumbo Mortgage Loan
After months of looking, you have found the perfect home and cannot wait to get started on the paperwork. You look at the price tag and without even thinking about it you tell the agent that it does not matter. But, without knowing, you have just decided to take on a Jumbo Mortgage with jumbo mortgage rates and you are not sure what to do. This is the time that you should start asking a lot of questions about the process and why your loan is in the jumbo category and not in the conforming loan category.
One of the first things that you are going to learn is that Fannie Mae and Freddie Mac set the guidelines for a mortgage. Anything above the norm is going to be considered a jumbo mortgage and it is going to have jumbo mortgage rates to go with it. This amount can change year after year and is affected by many different things. The economy plays a role because it has an effect on the housing market and what the current value on homes is. What once may have been a jumbo amount can now fall within the conforming range.
You are then most likely going to find out that the rates you are going to have to pay are going to be much higher than what you thought they were going to be. It is important to understand that you are looking at a loan that is very high risk. Because of this, the jumbo mortgage rates are higher with a jumbo mortgage than with a conforming mortgage. But, if you have excellent credit it is possible that you may be able to get the lowest rate possible although that is still going to be fairly high.
Naturally when you are purchasing a home, you are going to be asked to get an appraisal on the home that you are looking at. Some lenders may even ask you to get several of these before they make a decision on lending you the money. This can actually play in your favor if the home comes in at a lesser amount than what it is on the market for. If that happens, you may find that your jumbo mortgage will have lower jumbo mortgage rates because of the lower cost. It is something that you should have done as soon as possible.
The rules that you are going to have to play by and the amounts that you are going to have to follow are going to vary depending upon where you live. You are going to find that what may be considered a jumbo mortgage with jumbo mortgage rates in your area may be considered conforming somewhere else. The economy and the housing market where you live are part of the ultimate decision. Sit down and speak in length with your agent before you decide on a final decision. There are ways that you can lessen the pain of the process and they can help.
