Home loans fall into two categories based on their loan amount: conforming and jumbo loans. If you need a home loan that’s over the conforming limit, you will probably need to get a Jumbo mortgage.
Jumbo loans offer the same flexibility as conforming loans, however the only difference is that they are not eligible for purchase by Fannie Mae or Freddie Mac and must be sold in the secondary market. This means that the rates for Jumbo loans typically, will be slightly higher than home loans with similar terms that are conforming loans. Sometimes you may hear Jumbo loans referred to as non-conforming loans.
Who Should Get A Jumbo Mortgage?
If you are able to afford a more expensive home, but can't quite put enough downpament to bring the loan down to conforming limits, a jumbo loan is a great option for you. This is a good way to bypass the starter home and prevent you from having to move to a larger home in the future.
Perhaps you’ve found the perfect home, but it just happens to be in a neighborhood where all the homes are highly priced. A jumbo loan may be the only option you have in order to buy a home, due to the high-value real estate in the area.
Things You Should Know About a Jumbo Loan
A jumbo mortgage is a great way to rapidly build your credit. By making your payments on time, you could see your credit score improve. Also, due to the large amount of a jumbo loan, it may be more a little more expensive to refinance a jumbo mortgage, mainly because of higher closing costs.
Most Common Jumbo Loan Programs:
Adjustable Rate Loan Fixed 30 year, Fixed 15 year,.
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