Do the terms of Jumbo loan rates leave you with jumbo questions? What is a jumbo mortgage, what is it for and who get them. Where did the term jumbo loan come from anyway and are the rates any different than conventional loans?
Any type of loan that is bigger than what is generally considered a normal type of conventional loan is termed a Jumbo mortgage loan. You may have heard it referenced in the past as a California loan due to it’s wide use there to purchase expensive real estate before the recent housing bubble sent home pricing soaring.
Jumbo mortgages are loans above the conventional conforming loan limit of $417,000 (or $625,500 in Alaska and Hawaii) as set by Freddie Mac and Fannie Mae. However, the recent economic stimulus package temporarily increases the conforming limit to $729,750 until December 31, 2008.
Jumbo mortgages, usually associated with very high priced homes, also carry rather high jumbo loan rates as well. These rates can differ only due to the amount borrowed to purchase the home as and such the rates are higher and fairly hard to get. A mortgage interest calculator can help you determine the total cost of these type of loans.
Good credit, higher income brackets and great assets will give you the best chance at getting one of these loans. These are usually people who have owned homes before, and are considered good credit risks.
Just as loans can differ among the more conventional market buyers jumbo loans can be variable as well. Hybrids, adjustable and fixed rate loan are available in this type of market as well and loan to value ratio’s can be as high as 0. Terms of these loans can vary quite a bit as well depending on the type you get.
Will you be stuck with a jumbo payment getting that jumbo loan? Loan rates are as low as they have been in years but the short answer is probably yes. A mortgage interest calculator can tell you for sure.
Jumbo loan rates can typically run anywhere in the range of .125% to .75% and sometime higher depending on the terms of the loan. Although higher in term of interest paid, those who purchase a jumbo loan can typically absorb that cost. Most prefer putting down a larger down payment when getting their home loans which saves them a great deal of money.
If you are considering jumbo loan rates your best bet is to get online and use a free mortgage interest calculator which can tell you instantly what these types of loans will cost.