Consumers are interested in knowing what reason they might have to investigate a Jumbo Mortgage. In basic terms, a Jumbo Mortgage assists consumers in buying a more expensive home than they normally would consider . Interest Rates will be a bit higher than they would if the consumer decided on a more standardized mortgage. But, it could very well be worth it to the consumer if it would allow them to purchase their dream home. Another advantage is that consumers could be interested in a Jumbo Mortgage if they are considering investing their money by having multiple properties.
Consumers should consider a Jumbo Mortgage if they need to borrow more than $417,000. The cutoff between standard mortgage loan programs and Jumbo Mortgages for a single-family is $417,000. Fannie Mae (FNMA) establishes the Jumbo Mortgage limits every year. Consumers may use a Jumbo Mortgage to buy any type of residence such as primary homes, second homes / vacation homes or there may be other investment properties the buyer is looking at.
A Jumbo Mortgage can be obtained via a number of different programs/plans. The most common & popular Jumbo Mortgage programs are Adjustable-Rate Mortgages as well as Fixed-Rate plans. Consumers should fully investigate the best Jumbo ARM program they are interested in by contacting trusted and well-known lenders who will be able to tailor a program for them based on their needs.
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About JUMBO Adjustable Rate Mortgages
For Jumbo Loans, does the qualifying limit change depending on the home size?
Yes! On a yearly basis, Fannie Mae announces the loan limits for homes as shown below. These are Fannie Mae’s 2006 limits:
• 1 Family Home – $417,650
• 2 Family Home – $533,850
• 3 Family Home – $645,300
• 4 Family Home – $801,950
Other plans a consumer may wish to consider for a Jumbo Loan are: A Six Month LIBOR Interest Only Loan is a popular avenue for Jumbos as well as Stated and No-Doc programs that are available.
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Potential Pitfalls & Dangers of Adjustable Rate Mortgages
While an ARM may seem like a great idea at first when a consumer is shopping for a mortgage or refinance because the initial interest rates on ARMs are always lower than on fixed rate loans, there are other considerations. When interest rates were dropping, it looked like a good option even in the long term BUT today’s times are changing at this moment and the amount a consumer saves in the first few years could very easily be depleted when rates go up.
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