When you buy a more expensive home, it may mean that you want to apply for a jumbo mortgage.
Many home buyers assume that jumbo mortgage interest rates and down payment requirements will put these types of properties out of their price range and budget. However, this is often not the case and much of the conventional wisdom about jumbo loans is outdated and inaccurate.
To define the term, a jumbo loan is a mortgage that will exceed the amount approved for home loans if you are using a standard government-sponsored loan. In most areas of the country, this will be a loan of more than $417,000, but it can also be as high as $625,000 in areas with higher costs of living.
The Interest Rates
One very common myth is that jumbo mortgage interest rates are significantly higher than the government-sponsored or conforming loan rates. In fact, it is possible to find jumbo loans at equal interest rates or, depending on the market and the specifics of the deal, even at lower rates than the conforming loans.
Of course, with higher loans will come higher monthly payments even when interest rates are the same or lower than standard loans. Offsetting the purchase with a higher down payment is one way to address this difference.
Limited Selection of Lenders
While it is true that during the dramatic market downturn of the last decade jumbo loans were harder to get and only a small number of lenders offered competitive jumbo mortgage interest rates, things have changed.
Today, the top lenders and mortgage service providers around the country are able to offer home buyers these jumbo loans, which means buyers don’t have to rely exclusively on the big banks for these loans.
For highly competitive jumbo mortgage interest rates and top customer service, talk to the mortgage experts at Guaranteed Rate.
