Jumbo loan rates may leave many people with more questions than answers. Many people have never heard the term jumbo loan so in that context just remember that any type of mortgage loan that is bigger than what is known as a “conventional conforming loan” is called a jumbo loan.
A conventional conforming loan is one in which the loan amounts are set by Fannie Mae and Freddie Mac and is this case that amount, until just this year, was set at $417,000. In Hawaii and Alaska that amount would be $625,000.
The new economic stimulus package recently passed as upped that limit to $729,750 which is good until Dec. 13, 2008.
The housing bubble, which burst a couple years ago, drove demand up for these types of jumbo loans but now that the market has been in decline so have the borrower’s who once sought them out.
Jumbo loan rates have also declined with the faltering market as well but still remain higher than conventional conforming loan rates.
The difference can vary depending on the type of loan you get but can be as much as .75% higher in some cases.
The ability to obtain a jumbo loan has gotten more difficult as well due to the massive foreclosure debacle that has taken place.
Greater emphasis is now placed on the borrowers credit and financial state of affairs before approval but in general for those even considering such a loan finances are not usually a problem.
In most cases it is always more beneficial to consider a larger down payment to conforming loan levels which will have a greater variety of money saving benefits over jumbo loan rates.
Popularity: 89% [?]