A high priced home needs a jumbo mortgage
Just like the name implies, a jumbo mortgage is a very, very large mortgage. Basically a jumbo mortgage is a large mortgage where the amount that is borrowed is actually more than the amount set by the Government Sponsored Enterprises (GSE) who sets the guidelines for this type of loan. The GSE is a group of financial companies that is in charge of maintaining access to housing loans. They reduce the cost of loans so that more people can get financing and buy homes. The amount that is generally set for a mortgage by the GSE is $600,000.00. This is the amount that GSE has set as part of their duties.
If a mortgage is greater than $600,000.00 then it is classified as a jumbo mortgage. There are a lot of homes that cost more than that to buy and as home prices have increased over the years the need for jumbo mortgages has also increased. Not all lenders offer jumbo loans but there are some that do. Some lenders don't offer jumbo loans because they are a higher risk because the mortgage payments on these loans are quite high and you just never know when something might occur to affect one's financial situation.
The other side of the risk is that high priced homes can generally take longer to sell than a lower priced home because they are less affordable to many people. As such if the home owner is having financial problems and needs to sell their home it could take much longer to sell that home and get out of the mortgage. Because of the higher risk involved with jumbo mortgages many lenders will require a larger down payment on the loan.
With any mortgage that is above the GSE's maximum guideline amount of $600,000.00 the interest rates will be higher. With any normal home loan a home buyer can often get a mortgage even with no deposit to put down but this is not the case with a jumbo mortgage because of the higher risk the home buyer must have a deposit to put down on their loan. A jumbo loan will require a deposit but the whole process of applying for this loan is much the same as applying for any home loan. If you fall in love with a home that is in the high price range then there is hope for a mortgage through a jumbo home loan. If your credit is good, if you have money for a deposit and can meet the repayments, then you will be able to get a jumbo mortgage.
Just keep in mind that when you take out a jumbo mortgage you need to be prepared to pay a little more than a smaller mortgage. You are borrowing more but you will also have more costs and interest to pay. If you find your perfect home and you can afford the extra cost then apply for a jumbo mortgage and you can soon be living in your dream home.
TAGS: jumbo mortgage, jumbo mortgages, what is a jumbo mortgage
Article Source: Messaggiamo.Com
Related:
» Run Your Car On Water» Recession Relief
» Advanced Automated Forex Trading
» Profit Lance
Webmaster Get Html Code
Add this article to your website now!
Webmaster Submit your Articles
No registration required! Fill in the form and your article is in the Messaggiamo.Com Directory!
