Jumbo Mortgage Rates – An Introductory
Posted: Nov 18, 2013
They’ve been out of the market for so long that many people have forgotten about them. But Jumbo mortgages are back and the jumbo mortgage rates that accompany them are much lower than before. Many people are opting for this financing option to help them finance their dreams of owning homes and make other large investments alongside.
A jumbo mortgage is a loan that is much larger than the average loan. The jumbo loan is said to exceed the conforming limit of a regular loan. The conforming limit describes the limit of the price that a mortgage agency can buy from a lender. This limit is the standard that has been set by Fannie Mae and Freddie Mac. They are the two government-sponsored agencies that buy a majority of residential mortgages from lenders.
The conforming limits vary according to the prices of real estate within the region. Borrowers who have to take loans above these limits are often advised to take jumbo mortgages.
Avrus offers excellent Jumbo mortgage rates to those seeking large loans that exceed the conforming limit. These are an excellent financing option for those interested in purchasing luxury homes or financing other investments as they purchase their dream homes.
Taking a Jumbo loan for many is a great risk especially since you won’t be able to sell the property as fast as you may need to incase you default on payment. It is therefore necessary for Avrus to ensure that you earn an income high enough to be considered for this type of loan.
While Jumbo mortgage rates were extremely high in the past because of the large amounts associated with the loans, the interest rates on these loans have recently being reduced. Many mortgage experts argue that it may be cheaper for those with higher incomes to take out Jumbo mortgages as opposed to multiple loans when purchasing luxury properties.
It is practically impossible to get a Jumbo mortgage with a credit score below 720. Your credit history should be absolutely sparkling. Lenders are more thorough when it comes to checking on the credit history of those seeking to borrow extremely large amounts of money. You can therefore expect the lenders to check all three credit bureaus to get information on your credit score.
Apart from being strict about credit scores, jumbo mortgage lenders are also very strict about down payments. You may be required to pay at least 30% of the mortgage as down payment. It’s interesting to note that the more expensive a property is, the more likely that the percentage required as down payment will increase. Therefore more expensive properties may see you pay more than 30% as down payment.
There are some properties that lenders may not provide jumbo mortgage for. These include vacation and investment properties. You should also note that a jumbo mortgage may not qualify for refinancing. You should therefore ensure that you get the best possible jumbo mortgage rates to ensure that you are comfortable making payments for the long term.
Steve Avrus is the author of this article on avrus. Find more information, about best place to get a home loan here