Most consumers believe that all high priced homes require a jumbo mortgage for financing. This is not necessarily true since there are both conforming and non-conforming jumbo mortgages available today. Choosing the right jumbo mortgage that relate to the circumstances of the home purchase depends mainly on the amount of funds a borrower needs to finance.
Conforming jumbo mortgages are those sold to Fannie Mae or Freddie Mac or FHA high loan limit mortgages or VA loans. The conforming loan limit for Fannie Mae and Freddie Mac mortgages is $484,350 throughout the country, but can be as high as $625,500 in certain high cost areas. FHA mortgages and VA home loans have a loan limit up to $729,750 which also depends on the location of the property. When using any of these loans for financing, the guidelines are issued by the respective agency which makes them easier to receive approval.
Non-conforming jumbo mortgages are loans for mortgage amounts above the conforming jumbo mortgage loan limits. This type of jumbo mortgage is usually held by the lender who determines the guidelines.
Depending on the amount of financing that is necessary will determine the type of jumbo mortgage required. Knowing these options will help borrowers decide what is best according to their needs.
FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard 0.7 to 1% point origination fee.
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