| A jumbo loan is a mortgage with a loan amount that | | | | excellent credit score, and high income relative to your |
| exceeds the conforming loan amount. In 2010 those | | | | overall debt will also work in your favor and lower the |
| conforming loan limits range from $417,000 to $729,750 | | | | cost of a jumbo loan. |
| depending on the cost of housing in the area. It is the | | | | Types of Jumbo Mortgages |
| amount of the loan, not the value of the real estate | | | | Just because you are taking out a larger loan does not |
| that determines whether a jumbo loan is required. For | | | | mean you are limited to only a 30 year fixed rate |
| example if you buy a home for a purchase price of | | | | mortgage program. There is a wide variety of jumbo |
| $500,000 but have a 20% down payment, your loan | | | | loan options including: |
| amount will be $400,000 and qualify for a conforming | | | | - 3 Year Jumbo ARM (Adjustable Rate Mortgage) |
| loan. | | | | - 5 Year Jumbo ARM |
| Cost Of A Jumbo Mortgage Loan | | | | - 7 Year Jumbo ARM |
| Mortgage lenders set the price of borrowing money | | | | - 10 Year Jumbo ARM |
| with a home loan (the rate at which the mortgage is | | | | - 15 Year Fixed Rate Jumbo Mortgage |
| repaid over time and the fees charged initially) by the | | | | How to Apply For A Jumbo Loan |
| risk level of the investment. The more likely they | | | | The process of applying for a jumbo loan is the same |
| believe the mortgage holder is to make their payments | | | | as applying for a mortgage of a lower amount, though |
| each month for the life of the loan, the lower the cost, | | | | there may be increased requirements due to the larger |
| and vice versa. The risk level is determined by a | | | | loan amount. Your mortgage lender will collect |
| complex formula based on the data of how previous | | | | information to present to the underwriter who will |
| mortgages performed. Because there is more money | | | | approve or deny the loan, or ask for additional |
| involved jumbo mortgages inherently carry greater risk, | | | | information. This will include information on your financial |
| and will be priced somewhat higher than their | | | | past, present, and future such as your credit history, |
| conforming counterparts. | | | | current assets and liabilities, and your income. It will also |
| You can keep the cost as low as possible by showing | | | | include data on the property such as an appraisal |
| reduced risk to the lender in other areas such as | | | | giving an estimation of the home's value, and a title |
| borrowing a smaller portion of the value of the home | | | | search to be sure there are no outstanding |
| with by coming up with a large down payment in a | | | | undisclosed liens on the real estate. |
| purchase, or limiting the loan amount on a refinance. An | | | | |