ge loan is one whose total amount is over
$417,000 – Loans above this threshold are only slightly
different than those below, yet those differences can be
dramatic to borrowers unfamiliar with such a marketplace. It is
also important to note that the ceiling for standard mortgage
loans as opposed to Jumbo loans is not set in stone and is
therefore subject to change at any time. This amount is decided
by the two largest lending organizations in the Untied States,
Freddie Mac and Fannie Mae.
One of the most significant differences with a jumbo mortgage
loan will be the interest rate – Since lenders consider homes
with sale prices above the threshold to be =ECluxury=EE residences,
they have presented a potential concern regarding successful
resale of such homes, as well as an indication that appraisal
values in this category do not increase as steadily as those
homes below the jumbo cap. For this reason, the lenders imply
that they are taking on more risk with such places, therefore
higher interest rates are required to offset such liability.
Right alongside the higher interest rate will be a higher down
payment requirement – It is almost impossible to obtain
financing for a jumbo mortgage without a down payment, and this
is directly related to the potential risks described above. Most
jumbo mortgage lenders will require a minimum of 5-10%, and the
amount will be dependent on the borrower’s credit.
Stricter documentation required – Since the majority of jumbo
mortgage loans are with =ECalternative=EE lenders such as insurance
companies and private investment groups, these organizations
will commonly have stricter documentation requirements that may
include income and asset verification beyond what the standard
mortgage lenders request. Also, these alternative lenders will
usually have loan programs that allow for longer loan terms
than those offered to borrowers below the jumbo threshold.
Typically, jumbo mortgages can have terms stretching as long as
40 or even 50 years.
Jumbo Loans are Becoming Prevalent – With the steady increase
of residential real estate in the United States, the necessity
of jumbo mortgage loans is becoming more and more prevalent.
Certain geographic regions have property values that have
recently increased dramatically, therefore the increased
instances of jumbo mortgages can be tracked by location.
Borrowers, especially those in such areas, must familiarize
themselves with the different aspects of the jumbo loans to
ensure they are not caught off-guard or unprepared.
About The Author:
http://mortgagesanity.com/2007/02/06/mtg-lenders/ – Poor Credit
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