Jumbo Loans, otherwise known as jumbo mortgages in the housing market, are normally thought of as the kind of loans reserved for the most luxurious homes and properties. In general, this held to be true because jumbo loans were normally the type of loans that were extended to those with above-average credit and the financial means to procure the loan itself. Though jumbo loans are, in general, a better idea for those with a promising financial outlook, they have –to an extent- become more exclusive and economical.
The Average Numbers
Before you start to determine if jumbo loan rates are an economical option for your future financial needs, it is important to understand exactly what constitutes a jumbo loan. Jumbo loans surpass the set conforming loan limits (determined by Fannie-Mae and Freddie Mac) and give potential homebuyers a larger array of options when searching for property. The current average numbers for jumbo loan limits across the United States are generally between $417,000 and in some of the more pricey areas it can be as much as $625,000. Though a bit higher than the average on conforming mortgage rates, the rates on jumbo loans are now beginning to lower.
The Average Rates
If you determine that a jumbo loan is within your means, then it is best to investigate the current rates on Jumbo loans. Presently, jumbo loan rates sit at an average of 4.375%, 4.599% APR as quoted on Bank Rate.com – a number which is not vastly higher than what you would find on the conforming mortgage market. Small changes in the structure of a transaction can substantially change the terms offered. For example, with a 720 credit score as opposed to a 720 and a 20% down payment as opposed to a 25% down payment can increase the rate by ½ of 1% and / or discount points of 1.5%. Because slight changes in a credit profile alter terms available, it may even be a good idea for you to work with financial consultants to decide if the rates, in addition to the price of obtaining the loan, are the best option for your future purchase.
Who Qualifies?
The nature of a jumbo loan itself would naturally require that qualifying for jumbo loan would be a bit more stringent than it would be on the average real-estate and loan market. It is important to have a decent credit score and be able to show sufficient financial resources to justify an inquiry into purchasing a jumbo loan. Do not become discouraged, however, if you believe that you may not qualify for the loan itself or can’t keep up with the rates on the loan; there are ways to find out.
If you would like to find out if you can qualify for a jumbo loan or if the rates are affordable for you call your lender. If you are interested in solutions they may make qualifying easier, reduce monthly expenses and enhance cash flow then Capital Solution Services may be able to help.
