Jumbo Loan Rates Giving You That Losing Feeling?

When hearing the term “jumbo loan rates” you may find yourself wondering just what type of loan that is and who actually gets them. Which exactly is jumbo, the rates or the loan and who in their right mind would want either.

Jumbo mortgages are mortgages that are for bigger than normal loan amounts. They are also known as California loans because of their prevalent use in California to purchase the expensive homes that are located there. You could say the jumbo loan concept was likely born in California before the housing bubble created expensive real estate across the country.

Jumbo mortgages are loans above the conventional conforming loan limit of $417,000 (or $625,500 in Alaska and Hawaii) as set by Freddie Mac and Fannie Mae. However, the recent economic stimulus package temporarily increases the conforming limit to $729,750 until December 31, 2008.

Jumbo mortgages are the types of loans associated with exceptionally high priced homes and, subsequently, also carry higher interest rates. Jumbo loan rates differ from traditional home mortgages only due to the amount borrowed to purchase the home. Jumbo mortgages are facing higher rates and getting harder to obtain. A mortgage interest calculator can help you determine the total cost of these type of loans.

People who have owned their own homes in the past as well as having great credit, assets and a high income bracket are typically those who attempt to get these types of loans.

Conventional types of mortgage loans can vary widely and as such jumbo loans are no exception and have just as many variables as well. They may come as adjustable rate, hybrid and fixed rate loans with loan to value ratio’s as high as 0.

Over the years, mortgage interest rates have declined considerably so does that mean you will get stuck with a jumbo size jumbo loan rate? More than likely the answer is yes. A mortgage interest calculator will tell the story quickly.

Jumbo loan rates typically run anywhere from .125% to .75% and in some cases higher depending on all that small print contained in your contract! To most who obtain these types of loans the increase in payment amounts are really of no significance. Most prefer putting a larger down payment in play and stick with a more conventional type loan thereby saving the most money in the long run.

If you are considering jumbo loan rates your best bet is to get online and use a free mortgage interest calculator which can tell you instantly what these types of loans will cost.