Choosing a jumbo loan is oftentimes the single largest financial decision that a borrower will make. As with any loan it is important to compare rates, terms, and shop around for the best offer. Ocean Pacific Capital has over 28 years of experience to help you find the loan best suited to meet your needs.
Jumbo loans are not necessarily as large as people think. There are many misconceptions about jumbo loans. Many people assume that a jumbo loan is any loan over $1 million dollars. However that is not true of a jumbo loan. A Jumbo loan is any residential mortgage with a loan amount exceeding the maximum conforming loan amount determined by Fannie Mae and Freddie Mac, which is currently $417,000.
Rates on jumbo loans tend to be slightly higher than loans of a lesser value, because lenders generally have a higher risk on these loans. The conforming loan amount fluctuates yearly and varies from state to state. In 1998, for a single family home, any loan amount over $227,150 was considered a jumbo loan. That amount for a jumbo loan has increased yearly, and in 2005, any loan amount over $359,000 is considered a jumbo loan. The loan amount for a jumbo loan has also increased for two, three, and four family homes in most states. With the rise in property sizes and values, jumbo loans are more popular and valuable.
In many communities, jumbo loans are the only available option; therefore, they are being offered at more banks. The difference between a jumbo loan and a conforming loan is more than just the loan amount. Jumbo loans usually have an interest rate of 1/8 to ¼ point increase because they are a higher risk. However, jumbo loans also offer the fixed rate mortgages as well as adjustable rate mortgages. The repayment terms are also similar in jumbo loans. Still, a jumbo loan shares more similarities to conventional loans than differences. With either loan borrowers still have the option of choosing between a fixed rate mortgage and an adjustable rate mortgage. The repayment times are also similar, despite the larger amounts associated with a jumbo loan.
Jumbo mortgage and jumbo loan have identical meanings and are often used interchangeably. A jumbo mortgage involves borrowing money while using a house as collateral. For many families choosing who to underwrite a jumbo mortgage is one of the most important financial decisions they will ever make. Fortunately it does not have to be one of the most difficult. Ocean Pacific Capital will walk you through the process to find that jumbo mortgage. When looking for a jumbo mortgage it is important to make certain that it is the right loan product for you or your family. The cost of borrowing money with a jumbo mortgage is higher than that of a conforming loan. So if you do not need to borrow over $417,000 then you should be shopping for a conforming loan rather than a jumbo mortgage. This number may even be larger depending upon where you live and the number of families who will be living in the home. If you decided that a jumbo mortgage is still right for you then the next step is to determine how much you want to borrow. Do you plan on making a larger down payment on the house? Or are you using the jumbo mortgage to pay for only a small percentage of the total value of the home? Nail down an amount that you are looking to borrow before continuing your research. The next step is to start shopping for the jumbo mortgage.
To do this, you should employ a reputable mortgage broker, such as Ocean Pacific Capital. Ocean Pacific Capital offers competitive rates on jumbo mortgages by obtaining offers from over 130 different lenders. Jumbo mortgage rates and terms can vary widely so this step is crucial. Jumbo mortgages are complicated financial products and it is important to have an experienced and trusted mortgage broker.
The starting place to look is the interest rate associated with the jumbo mortgage. Jumbo mortgages are already more expensive than a conventional loan so it is important to receive the most competitive rate possible. However the interest rate offered is only the tip of the iceberg. Jumbo mortgage offers may have many other fees that go unnoticed at first glance. The lowest interest rate does not always equal the lowest borrowing costs. You can now be confident that you have found the right lender to handle your jumbo mortgage. A jumbo home loan is one of the many types of loans available for a buyer to choose from when shopping for a mortgage. For more expensive and larger homes sometimes a jumbo home loan is the only option available. There are options available for people who need a loan slightly above the maximums allowed by Freddie Mac and Fannie Mae. This type of loan is typically referred to as a jumbo home loan.
To avoid the slightly higher rates of a jumbo home loan, borrowers sometimes will use credit cards or other unsecured lines of credit to make up the difference. People sometimes may even use their vehicles as equity and take out a separate car loan. These however are all risky options to choose from and the savings achieved by the result of these efforts is negligible. Fortunately there are jumbo home loans and these are what most families choose when the value of the loan they are seeking is greater than that allowed by conforming loans. Jumbo home loans allow the borrower to take out one loan rather than go through all the hoops discussed earlier. A jumbo home loan is a convenient and simple type of loan that can help put you in a new home. Many peoples' first reaction is that they do not need a jumbo home loan. They may only want a small house. However today's reality is that even a small home can be expensive, and most single family home loans over $417,000 are considered a jumbo loan.
It is easy to be intimidated when confronted with the prospect of needing a jumbo home loan. Fortunately, the monthly payments on these loans can still be small and despite the intimidating name, many people are able to afford these loans. Jumbo mortgage loans are powerful financial products. Many people dream of owning or purchasing a house their entire lives and only a handful are able to do so with cash. The majority of the population has no choice but to finance when purchasing a home. Fannie Mae and Freddie Mac place strict limits on the amounts that can be borrowed with a conforming loan. Fortunately, many banks offer jumbo mortgage loans that provide higher limits than those offered by Fannie Mac and Freddie Mac. Jumbo mortgage loans have no limits.
If you are purchasing a four family home in Alaska the most you can borrow with a conforming loan is $1,037,400. The reality is that the majority of people do not purchase four family homes and of those that do an even smaller portion live in the state of Alaska. For a more typical single family, in the majority of states, the most they are able to borrow is $359,000. Fortunately, jumbo mortgage loans exist to help an ever increasing subset of home buyers. A jumbo mortgage loan can be the financial tool needed to pursue the dream of owning a home. However, deciding upon a jumbo mortgage loan is only the first step on the path to home ownership.
There are many types of jumbo mortgage loans with vastly different terms. Borrowers can choose from fixed rate mortgages and adjustable rate mortgages. The term of the loan is also an important consideration when looking for a jumbo mortgage loan. On top of all this there are hidden items that one needs to be careful of. For instance some less reputable banks may charge exorbitant fees to fill out a jumbo mortgage loan application. Other times financial institutions pack in hidden fees such as loan maintenance costs. All of these are items that should be factored in when searching for a jumbo mortgage loan. The good news is that are handful of reputable and honest jumbo mortgage loan lenders out there. A little research and a small amount of comparison shopping can go a long way to putting you in your dream home at a price that you can afford.
A jumbo mortgage rate, just as any other loan products, is influenced by the federal funds rate. The type of loan selected combined with the length of the loan will have the greatest impact on the jumbo mortgage rate. Today borrowers have many options to choose from. People can pick from either a fixed rate mortgage or an ARM (Adjustable Rate Mortgage) with typical terms between 10 and 40 years. The remainder of this article will delve into more detail on these various options and how the choices impact the associated jumbo mortgage rate.When shopping for a jumbo mortgage rate choosing a fixed rate mortgage is oftentimes the most expensive of the two loan types available. The reason for this is that you are not only asking the bank to be your lender, but also your insurance agent. With a fixed jumbo mortgage rate you are protected from any increases and agree to pay a fixed interest amount for the term of the loan. Consequently, a premium is charged for the loan and the jumbo mortgage rate is higher.
Despite the higher costs there are major advantages to a fixed rate mortgage. The first of which is there is never a worry that monthly payments will increase. Additionally, if interest rates rise at faster pace than they have historically, you could profit. ARMs oftentimes provide a lower jumbo mortgage rate. The interest charged for an ARMs fluctuates with the federal funds interest rate. Payments remain the same for a fixed period of time and then adjust at intervals for the remaining term of the loan. These intervals are usually set in 1 to 12 month increments. Despite the lower jumbo mortgage rate received by choosing this type of loan there is one major risk involved - interest rate fluctuations. If jumbo mortgage rates increase more than they have historically then this type of loan could end up costing more. Jumbo mortgage rates are typically less over the term of a loan if an ARM is selected. Whereas fixed rate mortgages are more costly, but provide the comforting of knowing that your jumbo mortgage rate will never increase. Fortunately we can help you with this decision. Fill out our jumbo mortgage rate request form
for more information."