Will Jumbo Loan Rates Leave You With Jumbo Payments?


Jumbo loan rates may leave you with more questions than answers. Exactly what is a jumbo mortgage, who would get one and why? Where did the name jumbo loan originate and are these type of rates different than other types of loans?

A jumbo mortgage is just another term for a loan that is larger than what you would consider for a normal loan. Also known as a California loan because of their wide use there years ago to purchase those jumbo homes, they have become know most everywhere due to the recent housing market bubble.

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The conventional conforming loan limit of $417,000 (or $625,500 in Alaska and Hawaii) as set by Freddie Mac and Fannie Mae are typical types of loans and jumbo loans are those that are above this range however, the recent economic stimulus package temporarily increases the conforming limit to $729,750 until December 31, 2008.

The recent run up in housing prices during the now burst bubble created more demand for these types of loans but they also carry higher interest rates. Although rates have declined in step with the market, eligible borrowers have declined as well as these loans have become harder to get. A mortgage interest calculator can help you determine the total cost of these type of loans.

Good credit, higher income brackets and great assets will give you the best chance at getting one of these loans. These are usually people who have owned homes before, and are considered good credit risks.

There are any different types of jumbo loans just as there are with smaller loans. They can be adjustable, fixed rate and hybrids and the loan to value rate can be as high as 100% depending on your financial situation and credit rating. Consequently Jumbo loan rates can vary widely based on what type of loan you are getting.

Over the years, mortgage interest rates have declined considerably so does that mean you will get stuck with a jumbo size jumbo loan rate? More than likely the answer is yes. A mortgage interest calculator will tell the story quickly.

Jumbo loan rates can typically run anywhere in the range of .125% to .75% and sometime higher depending on the terms of the loan. Although higher in term of interest paid, those who purchase a jumbo loan can typically absorb that cost. Most prefer putting down a larger down payment when getting their home loans which saves them a great deal of money.

Jumbo loan rates can be confusing and your best bet is the use of a mortgage interest calculator you can find free to use online. This will give you the best information you need to decide if this type of loan is best for you.


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