Jumbo Home Mortgage Loans

Jumbo Home Mortgage Loans

Jumbo mortgage loan is a home loan that exceeds the limit set by FNMA. This limit can change every year but in general it is around $300,000. In most cases you will be charged a higher rate if you apply for a jumbo loan comparing to the same type of loan for a smaller amount. This is caused by greater risk a lender takes granting you a jumbo loan.

A jumbo loan is considered a non-conforming loan. Lenders usually grant conforming loans; jumbo loans make only a small part of all loans granted. Conforming loans are less risky for lenders and they have lower interest rates, which makes them more attractive.

Despite the fact that most loans in US are under the limit set by Fannie Mae and Freddie Mac there are many jumbo loans done, particularly in California where home prices are extremely high.

Internet is a great place to get a jumbo loan for several reasons. Mainly, lenders are forced to offer their lowest possible rates due to extremely high competition. For example, local broker is not motivated to give you his lowest rates because he has stable client base and lesser number of competitors. Online the group of lenders competing for your business is much bigger, so an offer you can possibly get is potentially much more beneficial.

Internet is the best way to get competitive loan offers. Mortgage companies online usually can get you up to four of them from different lenders. To choose the best possible loan offer make sure you compare not only interest rates but all closing costs, points and fees a lender charges. If some information is not available right away feel free to contact a lender and ask whatever questions you have.

The best deal is not always the one that has the lowest interest rate. A lender can always charge more in points, fees or closing costs, so you have to study each quote very carefully before making your final decision.
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