Jumbo mortgages are the loans on the top end of mortgages, what you might think of as the “really big” ideas for mortgages. They are written in an amount above the conventional conforming loan limit set by the Federal Housing Administration.
How big is jumbo? Government-affiliated mortgage agencies define on a yearly basis the point where a conventional loan becomes a jumbo loan. In general, we’re discussing a loan that’s upward of $700,000. It’s a great deal of money, and the interest rates are higher than they are for conventional conforming mortgage loans.
But that doesn’t mean that you cannot still get good—or even great—jumbo loan rates! As long as you qualify, the money is out there.
Qualification for a jumbo mortgage includes:
- A downpayment of at least 20% for a purchase or equity of 20% for a refinance
- Income documentation
- Monthly mortgage payment not to exceed 38% of pre-tax income
- Generally is for a primary residence
- Credit score of 720 or better.
You also need to know that your jumbo loan rate will in all probability be adjustable, as fixed-rate jumbo mortgages are unusual.
You will be paying higher interest rates on a jumbo mortgage loan than you would on a conventional loan. This is because jumbo loans are considered riskier to the lender: not only is more money involved, but the properties purchased via the jumbo loan can be difficult to re-sell should there be a foreclosure, and the loans are not secured by the government.
The best jumbo loan rates can be obtained the same way you get the best mortgage loan rates: by going through Avrus Financial and Mortgage. We can assist you, not just in determining current jumbo loan interest rates, but in finding the best jumbo loan rates.