A jumbo mortgage is a type of loan that helps people buy homes that are so expensive, they need mortgages that are exceptionally high. Each year, the US government determines what amount is the minimum to constitute being “jumbo” and any home owner who needs a loan beyond that will likely end up paying higher rates when it comes to interest. Typical loans will meet certain guidelines, in most cases, to ensure that they can easily be sold by Fannie Mae to investors. However, these huge loans fall out of those guidelines. Currently any loan over $417,000 or a maximum of $625,500 in high cost areas that can be looked up by county at https://entp.hud.gov/idapp/html/hicostlook.cfm , would be considered a jumbo loan. In many areas of the country, even the high cost mortgage of $625, 500 is not sufficient resulting in the need for a jumbo loan.
Can You Avoid a Jumbo Loan?
You might wonder if you can avoid getting a jumbo loan, especially if you haven’t yet bought the home you are looking for. Suppose, for instance, that you need $425,000 for your home. You can avoid a jumbo loan by financing $400,000 with a conventional mortgage then get a second mortgage for the rest. Though you will need to pay a higher rate for the second mortgage, it will still be a lot cheaper than the rates of a jumbo loan.
What if You Already Have a Jumbo Loan?
You may think there is no hope if you already have a jumbo loan but this isn’t true. It may be possible that you can refinance a jumbo loan and then qualify for a conventional mortgage. This can save you a lot of money, of course, and will also come with a number of other benefits. You may find, for instance, that you borrowed $400,000 in 2004. That would have been a jumbo loan. Now, however, the limit is $417,000 so if you refinance, you will be able to get out of that jumbo loan rate. There are certainly other options too that you can find out by talking to a financial services company.
Refinancing the Jumbo Loan?
It is first important to become informed about the current state of your jumbo loan, the equity value of your home, interest rates, and loan details. Once you are armed with this information it is far easier to determine a solution to help you refinance your loan.
Now it is time to contact a financial service company that understands jumbo loans and refinancing alternatives. These companies are specialists when it comes to things like dealing with financing for those under special circumstances…like people who have jumbo loans. These companies have the knowledge and experience to help with these unique situations and can help you find the right solution for you if you currently have a jumbo loan. All you need to do is find one and contact them to get started.
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