A Jumbo mortgage is a mortgage loan that is higher than the conventional conforming loan limits. Fannie Mae and Freddie Mac, two government-sponsored enterprises set the limit on the maximum mortgage amount annually. The most recent maximum loan amount for 2010 was $417,000*.
That means anything higher than $417,000* is a jumbo mortgage.
The average interest rates on Jumbo mortgages are typically higher than conforming mortgages due to a higher risk to the lender.
Items of note:
- Jumbo mortgages often require a higher down payment of 20% or more for their loans. Many times two appraisals may be required.
- Loan terms are typically fixed, although, adjustable rates are available – they can have more strict guidelines.
- Your debt loan cannot be higher than 41% of your total gross income. Typically for primary residence homes.
If you are in the market for a jumbo mortgage please contact us. We have many programs to offer and a ‘make-sense’ underwriting that contributes to the success of the transaction.
* Conforming loan limits are higher in high-costs areas like Hawaii, California & Seattle.