When hearing the term "jumbo loan rates" you may find yourself wondering just what type of loan that is and who actually gets them. Which exactly is jumbo, the rates or the loan and who in their right mind would want either.
A jumbo mortgage is just another term for a loan that is larger than what you would consider for a normal loan. Also known as a California loan because of their wide use there years ago to purchase those jumbo homes, they have become know most everywhere due to the recent housing market bubble.
The conventional conforming loan limit of $417,000 (or $625,500 in Alaska and Hawaii) as set by Freddie Mac and Fannie Mae are typical types of loans and jumbo loans are those that are above this range however, the recent economic stimulus package temporarily increases the conforming limit to $729,750 until December 31, 2008.
Jumbo mortgages are the types of loans associated with exceptionally high priced homes and, subsequently, also carry higher interest rates. Jumbo loan rates differ from traditional home mortgages only due to the amount borrowed to purchase the home. Jumbo mortgages are facing higher rates and getting harder to obtain. A mortgage interest calculator can help you determine the total cost of these type of loans.
Jumbo type loans are typically made to people with higher income brackets, good credit and good assets. These are usually people who have owned homes before, and are considered good credit risks.
Conventional types of mortgage loans can vary widely and as such jumbo loans are no exception and have just as many variables as well. They may come as adjustable rate, hybrid and fixed rate loans with loan to value ratio's as high as 0.
Will you be stuck with a jumbo payment getting that jumbo loan? Loan rates are as low as they have been in years but the short answer is probably yes. A mortgage interest calculator can tell you for sure.
Jumbo loan rates can typically run anywhere in the range of .125% to .75% and sometime higher depending on the terms of the loan. Although higher in term of interest paid, those who purchase a jumbo loan can typically absorb that cost. Most prefer putting down a larger down payment when getting their home loans which saves them a great deal of money.
When considering jumbo loan rates your best bet is to get online and use a free mortgage interest calculator to determine if this type of loan is best for you.
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