Jumbo Mortgage Loan - Super Jumbo Loans

Extra-Large Mortgage Loans

The term "jumbo loan" generally refers to a mortgage loan for an amount above and beyond normal mortgage limits.

Conventional mortgages usually have certain restrictions on how high the total mortgage amount equals. Agencies such as Fannie Mae and Freddie Mac have a limit on the maximum value of any mortgage which they will purchase from a lending institution.

In today's market, homes are often purchased which cost more than the normal mortgage limits. This includes extravagant luxury homes, as well as reasonably-sized family homes. Real estate prices have gone up a lot in recent years, causing many homes' values to rise above the "normal" mortgage limit.

Although similar in many ways to traditional home loans, jumbo loans usually have a few key differences.

Higher down payment - jumbo mortgages often require an additional 5% on top of what a "normal" mortgage would require

Expensive to refinance - since the mortgage amount is so large, closing costs and mortgage taxes can be enormous

Higher interest rates - Although constantly changing, interest rates are typically .25% to .5% higher than "normal" loans

Begin the Quote Process

Select Your Country

Enter Zip Code

Home Buying Vocabulary

Wraparound Mortgages

Results when an existing assumable loan is combined with a new loan resulting in an interest rate somewhere between the old rate and the current market rate. The payments are made to a second lender or the previous homeowner who then forwards the payments to the first lender after taking their share.

See all Vocabulary

Frequently Asked Question

Why should I get pre-qualified before I begin house-shopping?

Answer:
It is a good plan to get pre-qualified for a mortgage in advance because it gives you advantages such as knowing how much you can spend and what your payments could be, as well as having more buying-power since a seller will see that you have the money ready and waiting, they will take your offer more seriously.

See all FAQs