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

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Home Buying Vocabulary
 

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Frequently Asked Question
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