Jumbo Loans
General Information:
These are loans that are over the Fannie Mae and Freddie Mac limits of $417,000. They come in both fixed rates and adjustable rates. There rates are higher than conforming loans, since these loans are not guaranteed by Fannie Mae or Freddie Mac. These loans are also called non-conforming loans, but not all non-conforming loans by definition are Jumbo loans. Rates for these loans vary by lender and by your credit quality. These loans can have special niche characteristics, which will be cover under niche loan products.
Advantages:
- These loans are available for higher priced homes (over $417,000).
- Qualifying guidelines are generally similar to Fannie Mae and Freddie Mac.
- Some have niche variation for easier qualification (See niche loans section).
- Lower interest rates than sub-prime for loans of equal size.
- Some products can be tailored to individuals needs.
Disadvantages:
- These loans have a higher interest rate than conforming loans and government loans, but are less than sub-prime.
- Can often take more than one appraisal to verify a homes value, so this adds more cost.
- Closing costs are generally higher on Jumbo loans, because the sizes of the loans are larger.
- Jumbo loans often have rate adjustments if your credit does not meet their standard.
- These loans are generally not assumable by another borrower.
When should you consider this loan?
- You should consider this loan product for loans over $417,000.
- You should consider these loans if there is a niche you need to qualify like “Stated Income” or “No Asset Verification”, etc.
- Unless you need a special variant “niche” or the loan is over $417,000, then this product is probably not for you.
MCA offers a product to protect you against potential mortgage fraud and over-charging. It is called the Consumer Protection Plan. A Mortgage Professional will review your initial mortgage disclosure documentation and when the loan is ready to close the MCA professional will also review your closing settlement documents to make sure you received the correct program, rate and fees as initially disclosed.
