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

Broker

One who receives a commission or fee for bringing buyer and seller together and assisting in the negotiation of agreements between them.

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Frequently Asked Question

What sort of down payment might I need to buy a home?

Answer:
Every lender offers different loan programs, but you are likely to find numerous down payment options regardless of which lender you choose. It is relatively easy to find loan programs which offer little or no money down, depending on the type of loan and your financial profile.

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