Any mortgage in excess of $417,000 USD in most states is considered to be a jumbo mortgage. This applies to most states, but there are a few states with amounts of up to $729,750 USD that are required to qualify as a jumbo mortgage. The jumbo mortgage is an unconventional type of loan which is provided for borrowers that require a large funding amount to purchase a property.
The jumbo mortgage is referred to as a high risk loan due to the fact that there is such a high amount of money being borrowed. This could cause serious issues for the lender if any borrowers default on the loan. As a result of this, it is common that a high interest rate is required for you to be able to obtain this type of financing. Additionally, the minimum down payment for this type of loan is higher than most as most banks require a 20% down payment or more.
Advantages and Disadvantages of the Jumbo Mortgage Loan
The advantages and disadvantages of this type of loan are fairly obvious. First off, the only real advantage is that you will receive financing in a large amount and this opens up many purchasing opportunities. However, there are a few disadvantages. The major disadvantage is the high interest rate which can make this financing very costly. The need to obtain personal mortgage insurance is also disadvantageous as well as it is an extra expense you may have wanted to live without.
Should You Apply for a Jumbo Mortgage Loan?
If you require a mortgage loan higher than the amounts set in your state then you will definitely have to consider this type of financing. If you are just slightly passed the limit then it is recommended that you try to provide a larger down payment to knock you out of the excess amount so you do not need to obtain a jumbo mortgage. This will save you quite a bit in interest payments as you will qualify for a lower interest rate. Ultimately, if you need to borrow a substantial amount then you will have to deal with the higher interest rates though and all you can do is shop around for the best jumbo mortgage loan available.
How to Compare Jumbo Mortgage Loans
If you would like to compare jumbo mortgage loans then you will need to obtain jumbo mortgage quotes from various lenders and compare them. You will need to look at other information as well, such as the repayment terms, potential fees or charges, and so on. It is important that you compare a number of jumbo mortgage loans to find the best interest rate possible. You could save thousands or even tens of thousands of dollars by shopping around for the best interest rate on your jumbo mortgage loan.
How to Obtain Jumbo Mortgage Rates
The rates are essential for comparing your options of jumbo mortgage loans. You will be able to obtain them by contacting the jumbo mortgage loan provider and providing them with some basic information. It may be possible to obtain a number of jumbo mortgage loan quotes only as well through the website of the lenders. They may have a calculator tool that provides loan rate quotes on their website so you could look out for this. Filling out a quote request form or sending them an email may also be a good idea. The interest rates they charge are often advertised as well but they may vary depending on the mortgage amount and the particular property that is being financed.
Choosing a Jumbo Mortgage Loan to Apply For
Once you have gathered a list of jumbo mortgage rates you can begin comparing them. The interest rate will be the major factor in your decision on which loan to apply for. You will want to look at the terms of the loan as well though. Factor in all important variables and determine which of the lower interest rate offers provides the best terms in your opinion. Ultimately, you will be able to find a reasonable interest rate and save quite a bit for a jumbo mortgage loan if you shop around and compare jumbo mortgage rates so make sure you take the time to do so.