|
[ Join discussion ]
|
Jumbo Mortgage: Way to financing/refinancing a bigger home
If you're into buying a bigger home or refinancing to pull out lump sum cash, then jumbo mortgages may be just what you need.
Until the changes made to the Freddie Mac and Fannie Mae guidelines in 2008, a mortgage exceeding $417,000 on single family home was known as Jumbo loan or Non-conforming. But as per the Economic Stimulus Bill signed February 13, 2008, the conforming loan limit has been extended to $729,750 for high cost areas only till the end of 2008. Investors like Freddie Mac and Fannie Mae will therefore purchase loans (originated between July 1, 2007 and December 31, 2008) up to $729,750 till December 31, 2008. However, the limits are even higher in Alaska, Hawaii, and other areas depending upon the government estimates of home prices in such areas. How do I qualify for Jumbo Loans?Check out 3 factors prior to going for a bigger loan:
How's the interest rate?Usually jumbo loans are available at 1-2% higher rate than that of conforming loans. The higher your jumbo loan amount, the higher is the rate offered. Other factors affecting the borrower's rate are his financial situation, creditworthiness and debt-to-income ratio.
The higher rates for bigger loans account for the greater risk involved. That's because once a borrower defaults, he'll not find it easy selling his home and paying off the loan. Neither will the lender be able to sell off through foreclosure or deed-in-lieu and recover the proceeds. The reason is, there's only a small market for homes secured by jumbo loans; hence this translates into higher interest rates charged by lenders. How can I make jumbo loans more affordable for me?Here are 3 tips to help you structure the loan such that you can afford it.
If you have good credit and your income is high enough, you'll be better off with a jumbo loan. But be prepared for the strict underwriting requirements, often more than one appraisal, detailed inquiry about your finances, income and debt and other factors which affect your ability to pay off the bigger loan. |
|
| Author | Message | ||||||
|
Carol Guest 0.10 Dollars($) |
|
||||||
|
Joined: 22 Oct 2005 Posts: 4417 Location: ALASKA 208.06 Dollars($) |
|
||||||
|
Community Experts ![]() Joined: 28 Jan 2006 Posts: 378 Location: Dallas 56.65 Dollars($) |
|
||||||
|
taira Guest 0.10 Dollars($) |
|||||||
|
Joined: 27 Jun 2007 Posts: 3328 474.61 Dollars($) |
|
||||||
|
Joined: 31 Mar 2006 Posts: 815 Location: Hawaii 155.15 Dollars($) |
|||||||
|
xyz Guest 0.10 Dollars($) |
|
||||||












