loan type: Jumbo Mortgages
jumbo loans are non-conforming loans
that do not meet terms and conditions set forth by Fannie Mae and Freddie Mac.
- These two stock-holding companies
purchase mortgage loans from lending
institutions and secure them for
resale to the investment community.
- Fannie Mae and Freddie Mac establish
maximum loan amounts, income requirements,
down payment requirements, and type
of suitable properties. Loans that
do not conform to these guidelines
are referred to as non-conforming
view sample loan limits: http://www.fanniemae.com/
Jumbo Loans Have Higher Loan Balances
the loan balance for jumbo loans are above the maximum loan amounts established by Fannie Mae and Freddie Mac thus jumbos are "non-conforming" loans.
Jumbo loans are used to buy large, expensive homes.
Jumbo Loans Have Higher Interest Rates
the interest rates on jumbo loans are generally higher than rates on conforming loan
The fixed rate can range anywhere from 0.11 to 0.77 points higher, depending on the region.
Adjustable rates are 0.01 points higher, but tend to narrow as the ARM adjusts.
Mortgage Lending Options