Understanding Jumbo Mortgages
Filed Under (Mortgage) by admin on 20-08-2009
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A jumbo mortgages is a home loan that exceeds the limits set by Fannie
Mae and Freddie Mac.
How are jumbo loans different?
What differentiates jumbo mortgage loans is the loan amount. At present, loan amounts that are higher than $417,000 are usually deemed jumbo mortgages. This determination is made by comparing industry standards for average housing loans as governed by the two biggest secondary mortgage lenders, Fannie Mae and Freddie Mac.
Fannie Mae and Freddie Mac set industry standards for ‘conforming loans’; Home loans beyond those maximums are regarded as jumbo mortgages. These two agencies cap the dollar figure for loans that they will buy (that’s where the $417,000 figure comes from). Larger loan amounts are funded by other investors such as banks and insurance companies. Note that the dollar figure set to qualify jumbo mortgages differs by locale, so the limit is higher in Hawaii and Alaska (and in some other states). In the majority of the U.S., jumbo mortgages are those larger than $417K.
Available Terms – 15 Year Fixed, 30 Year Fixed, or Variable 30 Year
Jumbo Mortgage
The terms for jumbo mortgages vary similarly to other types of housing loans. Buyers can choose between variable rates, like 3/1 or 5/1 ARMs, for a 15-30 year jumbo mortgage, or a 15 or 30 year fixed jumbo mortgagerate.
Whether a 15 or 30 year fixed jumbo mortgage or an adjustable rate is best for you will depend on your plans and situation.
A 30 year fixed jumbo mortgage is better for those whole plan to own the home for a very long time. With this type of mortgage, the rate will not go up but it will never go down, either – it stays the same for the life of the loan. This is good because the payment is predictable, and cannot rise sharply if interest rates do. On the downside, the 30 year fixed jumbo mortgage rate is higher since lenders know they can never charge more than the original rate.
The lowest jumbo mortgage rate is usually an adjustable 30 year jumbo mortgage rate. Lenders understand their potential to benefit from increases in rates over time, so they are willing to lend at a lower rate in the beginning. Although, the lower rate won’t last. A variable 30 year jumbo mortgage rate will be fixed for 3 to 5 years, and then will adjust annually according to an index. Even small increases could mean significantly larger monthly mortgage payments.
Going with an adjustable 30 year jumbo mortgage rate works well when a buyer plans to move within the 3 to 5 year fixed period. For a buyer more concerned with smaller initial payments, or who will likely refinance in the near future, the variable 30 year jumbo mortgage rate is better than the 30 year fixed jumbo mortgage. Why pay the higher fixed rate when the buyer knows this isn’t their long-term plan?
All jumbo mortgage products – 15 year, variable 30 year, or the 30 year fixed jumbo mortgage – have their benefits. A trustworthy mortgage lender with experience financing jumbo mortgages is a buyer’s best resource for determining which product is right for them.
Watch the video related to mortgage
Part II of the introduction to mortgage-backed securities
Help answer the question about mortgage
How do I become a mortgage broker in ohio?I know the mortgage industry is in a mess right now, but I am looking toward the future when we rebound. Wondering what requirments there are to become a mortgage broker in Ohio. I am looking to work this industry on the side, as I already have a full time sales job. Also what are the typical commisions paid to brokers for sub-prime, prime, and jumbo mortgage loans…is this split with the company you work for? I already work 100% commission, so that is not a problem. Any input on this career is greatly appreciated, ie the ups and downs.
It makes 5m risk free, but it could have made much more with some risk in the long run (according to this model) if it would keep its loans. The irony is that if banks starts to behave this way the banks who operates more traditional (not sell their loans) would be stuck with all the downside if (when) the housing market tanks. So a bank has every incentive to get rid of housing loans and make short term profits and thus further increase the incentive to make rotten loans.
So this “shares” are stock or bonds?
That depends on a few things.
How much equity do you have in your current home?
What is your credit score?
What is your debt load?
Yes you can get a 2nd mortgage on your current home to buy another, people do it all the time.
Your income must support maintaining your current home (you should be able to get a renter in there to offset the mortgage payment or some portion there of) and support your new mortgage.
You can get a loan with a BK. Many lenders require it to be discharged for 2 years, however, there are still a few lenders that will lend on a BK only being discharged 1 day.
In a nutshell, yes you can, if all your other ducks are in a row.
Good luck
depends on your interest rate
lets say you did a 30 year 5% fixed
1825.19 would be your monthly
http://public.propertylinx.com/custom/templates/mortgage_calculator.asp?price=350000
here's a calculator.. toss around your own numbers.
read on…
http://myfinancetimes.com/2008/05/24/subprime-mortgage-creditcrisis/
The above article elucidates you on the actual subprime mortgage crisis in us. and the persons behind the mortgage fraud and all those who are to be directly blamed for this financial catastrophe.
superb presentation
When a senior lien forecloses, a junior lien is wiped out.
So if the first mortgage holder forecloses, the second trust deed goes away. If the second forecloses, you'll still owe the first.
Oftentimes, if a senior lien forecloses, the junior lien holder will send a representative to the auction to defend its interests by making sure the property goes for enough to pay the junior lien as well. Or they buy it themselves with the idea of reselling. Costs money, yes. But better than losing their whole investment.
Speak to your lender about a FHA 203K loan. The 203K loan is sometimes refererred to as a "rehab loan". With a 203K you can have the kitchen/bedroom remodel costs put into your initial loan. The rehab must have estimates up front and also must be done by an approved contractor.
The home must be able to be appraised at the completed price. For example:
Say the home is listed at $150,000 and has an old outdated kitchen and bathroom. Before making an offer you get estimates from an approved FHA203K contractor for remodeling the kitchen and bathroom. The estimates come in at $30,000.
An appraiser will then appraise the home as if the remodel has already been done. As long as the home appraises at $180,000 you will be able to get the loan.
A big advantage to doing it this way is you do not need to have that $30,000 in hand or need to borrow the money later at higher rates. The rehab is done right away so you do not have to live with the outdated kitchen/bathroom. Your monthly payment on the loan on 150K vs 180K should amount to around $180/month additional.
PMI protects the lender in case your loan goes into default. The only way to have it removed is when you owe less than 80% of your home's value.
creditreport.imess.net – try this service to boost you credit score before getting loan. After credit repair you can get the loan with minimal interest rate.
Amazing!!
Who allowed the Banks to sell their right to the investment bankers? Who manipulated or changed the law/rules/ regulations? Unbelivable. Unlimted greed. super presentation.
Who( Entity) is in charge of the rules and regulation of the banks?
Thanks so much for this series. I’ve been wondering what was at the bottom of this whole mess for a while now.
i do not see any problem with you getting the refinance and i would not worry about the business end affected it!!!
i think it is because they are getting cash (lots of it) every time they try this model…then they can replicate it again and gain more cash in one short period of time rather than over the course of 10 years even if it would have been more.
someone correct me if i am wrong.
barney frank,chris dodd,ACORN,and all other democrats forcing banks to give loans to PEOPLE WHO COULD NEVER PAY THEM BACK..
well done
Who allowed the Banks to sell these right to the investment bankers?
Obviously there was a law or rules and regulations, who broke all these for their greed. Unbelievable.
thank you for your presentation, superb!