Jumbo Mortgage Loans: Are They the Right Choice For You?
When most people think of “jumbo mortgages,” they think of sprawling mansions and lots of acreage. But some people need them – even if they are not trying to buy a luxury home. You don’t have to be a Bill Gates or a movie star or the crown prince of Monaco to need a jumbo mortgage.
Here in Utah, for example, the real estate market is growing rapidly. Home purchases are on the increase, which pushes up the demand. This means that homes can quickly appreciate in value (the law of supply-and-demand: high demand pushes up costs as sellers can get more in that environment). You may need a jumbo loan when real estate sales are booming, as the seller will be asking more.
The technical name for a jumbo mortgage loan is a non-conforming mortgage loan. It is called “non-conforming” because it exceeds Federal (Freddie Mac and Fannie Mae) limits on loan size – conforming loans conform to those guidelines, while non-conforming exceed them.
Except for Hawaii and Alaska (who have higher limits), the current limit for conforming mortgage loans on a single-family dwelling is $510,400. If you need to borrow a larger amount then you need a jumbo loan.
Often lenders will resell their mortgage contracts to other lenders, but because jumbo mortgages exceed the normal guidelines, they are harder for lenders to sell, and so it can be difficult to secure them. Also, the fact that you are trying to borrow a larger amount increases the overall risk to the lender. Yes, it can be challenging to secure a jumbo mortgage, especially in some real estate markets.
This is why, if you are seeking out a jumbo home mortgage, don’t try to do it alone. You need to have someone who knows this industry to help you to get the best loan terms possible.
To speak plainly, for some borrowers their situation may require them to secure a jumbo mortgage if they are going to be able to purchase the home that they need.
And there is good news here – homes secured by a jumbo mortgage can often appreciate in value faster than lower-priced properties, even in the same neighborhood. The key to getting a house that is larger, or one located in a more desirable neighborhood – rather than settling for a smaller, or lower-priced home, or one located in a less-than-ideal neighborhood, could be a jumbo mortgage.
Don’t think of your home purchase as an expense – your home is an asset, and with a jumbo home mortgage you can secure an above-average home which can appreciate in value nicely, and after the kids are grown you can sell that home at a tidy profit to secure your retirement.
Of course, jumbo loans have different qualifications and are offered at different interest rates – at Trillion Mortgage we can do a deep-dive into your total situation and reach out to lenders with the options that you need.
There is no need to settle for a jumbo home mortgage with an overly-high interest rate or monthly payment. There are competitive packages available and at Trillion we know what they are and who offers them.
Don’t delay – contact Trillion today and tomorrow you’ll be well on your way to owning your own home!
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