Jumbo Loans & Super Jumbo loans

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Jumbo & Super Jumbo Loans

Jumbo Loans

Jumbo loans, also called non-conforming loans, are mortgages with loan amounts greater than the "conforming loan limit." For 2008, the single family residence (SFR) (including condominiums) loan limit is $417,000, unchanged from 2007.

In many parts of the United States, a home in the $400,000 range is considered a starter home. Most of us think in terms of the real estate market we live in (i.e. we see the term �jumbo� as relative to our marketplace). Fannie Mae and Freddie Mac, federal government entities, are the two largest buyers of jumbo loans nationally. They set the conforming and jumbo loan limits based on their national perspective. Each November, the new �conforming loan limits� are published by these organizations.

What is the Conforming Loan Limit?

The conforming loan limit is the maximum loan size that either Fannie Mae or Freddie Mac will commit to purchase from a mortgage lender (or bank) for the financing of a SFR (or condo). Once a bank funds your loan, the loan is sold and in most cases ends up being purchased by Fannie Mae or Freddie Mac. Once the money is exchanged, jumbo mortgage funds are again available to re-lend, and the flow-of-funds cycle begins again.

When a Loan Becomes a Jumbo

When a loan amount is greater than the conforming loan limit, it is considered a Jumbo Loan, or non-conforming loan, usually with slightly higher interest rates. With the historically low mortgage rates the USA has been experiencing that past 5-years, jumbo loans afford many home buyers the ability to purchase the house they want and have a payment they can afford.

When a Loan Becomes a Super Jumbo

Most lenders have maximum lending limits of $650,000, $1,000,000 or $1,500,000. The term "jumbo loan" is applied to anything above the conforming limit of $417,000 to the lender's maximum lending limit. Loan amounts above these three standarized lending limits can be considered "super" jumbo loans. The maximum loan limit for super jumbo loans typically extends to $10M to $20M

Super jumbo loans above $1M often require two appraisals (varies with lender) and the borrower's liquidity becomes more of a factor in qualifying.

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With interest rates so low, consumer interest in jumbo loans is very high. Many folks are looking to move up into a high-end home but do not want the jumbo loan rate and the jumbo loan payment that is traditionally associated with a jumbo loan.

Call today to have us structure a jumbo loan (or super jumbo loan) with the lowest possible monthly payment, if that is your goal.