Information on Jumbo Mortgage Rates and Loans

2007-03-08 10:33:40

( Financial )



The maximum amount that a person is allowed to borrow under a mortgage loan is usually determined by a certain mortgage association/corporation. The maximum mortgage loan amount limits typically change at the beginning of each year, and differ in each state. Mortgage loans that exceed the maximum conforming limits are known as jumbo mortgages.

Jumbo mortgage rates are based on the federal funds rate, the duration of the loan, the type of jumbo loan and the person’s credit score.

Jumbo mortgage rates tend to be higher than the interest rates of a typical mortgage loan because of the increased chances in the non-payment of an individual. Similar to the ordinary mortgage loan, jumbo mortgage rates are either charged with a fixed interest rate, where rates remain the same throughout the life of the loan, or in the form of an adjustable rate wherein interest rates change during certain time periods throughout the life of the loan.

Fixed jumbo mortgage rates tend to be higher because you are paying for the assurance of fixed monthly payments. Despite the low mortgage rates that are offered under a jumbo adjustable rate mortgage, you can end up paying more for your loan due to the frequent fluctuations in interest rates.

Aside from higher mortgage loan interest rates,
jumbo loans require you to make a larger down payment compared to other kinds of loans.

Jumbo loans are liable to higher closing costs when refinanced; however, you can request your lender to extend or consolidate your loan agreement, so that you do not double up on the payment of your mortgage taxes.

Jumbo loans are becoming more popular these days with the increasing costs of real estate properties. In order to obtain the best jumbo mortgage rates, it is recommended that you shop around and compare jumbo mortgage loan interest rates with various lenders. Opting for the lowest mortgage rate is not always the best option. You should make a comparison based on the closing costs, interest rates and other fees as well. Also ensure that the fees and rates that are charged by your lender conform to the laws of your state. Shopping online is usually the best option for lower rates.


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