What Is A Jumbo Mortgage Loan?
- 2 weeks ago
- by mariajohn
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A jumbo mortgage is a loan that is much larger than the average loan. The jumbo loan is said to exceed the conforming limit of a regular loan. The conforming limit describes the limit of the price that a mortgage agency can buy from a lender. This limit is the standard that has been set by Fannie Mae and Freddie Mac. They are the two government-sponsored agencies that buy a majority of residential mortgages from lenders.
Jumbo mortgage is considered as higher risk loan as larger amount of money is borrowed and it may become troublesome if the borrower defaults on the loan. Hence, you need to pay higher interest rates for such jumbo loans. Many banks and lenders charge at least 20% rates. The foreclosure rates of subprime loans significantly affect the lenders and the banking industry. Apart from being strict about credit scores, jumbo mortgage loan lenders are also very strict about down payments. You may be required to pay at least 30% of the mortgage as down payment. If you want to know more about jumbo mortgage loan, Contact to our loan officers!