Jumbo Loans: Getting Approved
Getting approved for jumbo loans in today’s market can be a little different than it was just a couple of years ago.
But that doesn’t mean that it is impossible, it just means that you want to work with someone who knows what they are doing when it comes to jumbo loans.
Depending on where you live in the country, a house that costs more than $400,000 can be a basic starter home. Which makes many people ask “why is the $417,000 the cutoff for regular mortgages and anything higher than that is considered a jumbo loan?”
The answer to that question is quite simple: Fannie Mae and Freddie Mac, two government sponsored mortgage entities set the limit each year for what the “regular” loan limits are — and anything above that number is considered a jumbo loan.
The highest loan amount for a “regular loan” is often called the conforming loan limit, and is announced by Freddie Mac and Fannie Mae each January. This year, the conforming loan limit announced by both Fannie and Freddie for single family residences is $417,000. Any loan that is above this loan amount is considered a jumbo loan.
Jumbo Loans: What To Expect
Whenever you are shopping for a jumbo loan, you will notice that the jumbo loans that you can get typically have a slightly higher interest rate than a conforming loan. But, when you compare a jumbo loan with a conforming loan, you can find that the jumbo loan products can offer a wider range of flexibility when it comes to loan program and what kind of payment a jumbo loan borrower wants.
Generally speaking, jumbo loans programs can either be fixed or adjustable and may have an interest-only option available. Because jumbo loan programs change every day, it is important to speak with a jumbo loan expert who can understand your current financial situation as well as what you are trying to accomplish and then help you find the best jumbo loan program available.