Housing prices across the country have been rising at alarming rates for the past several years. This is great if you already own your home; however, if you are in the market to purchase a home it can be a frustrating problem. The mortgage industry in the United States is regulated by two organizations youve probably heard of: Fannie Mae and Freddie Mac. These organizations set limits for borrowing; if the home you purchase is above this limit you will need to seek what lenders refer to as a Jumbo Mortgage Loan. Here are the basics you need to know about Jumbo mortgages. The limit for conventional mortgage lending in the United States is called the conforming limit. Fannie Mae and Freddie Mac set this limit in 2006 to $417,000. In some parts of the country this still will not get you much of house; in these areas you will have to seek non-traditional financing from a jumbo lender. The problem with jumbo mortgages is lenders charge higher interest rates because of increased risk. Because of the extra costs associated with jumbo mortgages, it is important to do your homework prior to applying for a mortgage. Researching jumbo mortgage lenders and carefully comparing loan offers will help you avoid a variety of mistakes many homeowners make with jumbo mortgages. When you compare jumbo mortgage offers you need to consider more than the Annual Percentage Rate. Use the Good Faith Estimate provided by the lender to make the most informed comparison when choosing the best mortgage for your financial situation. You can learn more about shopping for a jumbo mortgage loan, including common mistakes to avoid, by registering for a free mortgage guidebook. |
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