If you need to borrow a large amount for your mortgage that is over what lenders consider the conventional mortgage limit, you will need to take out what is considered a Jumbo Mortgage. Here is what you need to know about Jumbo Mortgage loans. Mortgage lending in the United States is regulated by two financial organizations: Freddie Mac and Fannie Mae. These organizations set guidelines for mortgage lenders and set limits for borrowing with a traditional mortgage loan. For single family borrowers the limit in 2006 is $417,000. If you need to borrow more you will need to seek financing from a non-traditional lender with a Jumbo mortgage loan. Home value appreciation is forcing many homeowners in parts of the country to seek Jumbo mortgages in order to qualify for financing. Interest rates for Jumbo mortgages are typically much higher than those for traditional mortgage loans because there is additional risk for the lender. This risk is passed on to the borrower in the form of higher interest rates and lender fees. Because there are additional expenses it is important to shop around for the best jumbo mortgage offer. You will need to carefully compare offers from a variety mortgage lenders and look at all aspects of the loan including application fees, interest rates, lender fees, closing costs, and points. To learn more about finding the right loan for your situation and avoiding common homeowner mistakes, register for a free mortgage guidebook using the links below. |
