| Many homeowners in luxury home areas know that | | | | anticipate an easy approval process. Mortgage |
| jumbo home loans have increasingly become more | | | | searchers will discover various prices and availability |
| costlier and much harder to get approvals due to the | | | | across the industry. Borrowers who are seeking to |
| current constraints on credit from lenders. This trend | | | | refinance and initially only were eligible for a jumbo loan |
| may be showing signs of a turn. | | | | may fit into the higher loan conforming loan limits if they |
| The term "Jumbo" in the housing industry means | | | | are in a high cost area. |
| mortgage amounts that are above the limit to be | | | | A conforming mortgage loan will almost always get |
| acquired by government-backed companies, Freddie | | | | borrowers the best rate. And nowadays that equals |
| Mac or Fannie Mae. The current "conforming loan | | | | rates in the mid-five percent to low six-percent range. |
| amount" limit for Fannie and Freddie is $417,000 in | | | | The loans are there but many homeowners complain |
| many areas of the country, but it rises all the way to | | | | the requirements are too strict. As an example, some |
| $729,750 in high-cost areas in the United States. | | | | major lenders require borrowers to have at minimum |
| A major lender in Bank of America who took over | | | | credit score of 720, full documentation and at least |
| Countrywide Mortgage recently started promoting their | | | | 20% down payment (if a refinance, a minimum of 25% |
| own jumbo program with considerably lower rates | | | | equity is necessary). Moreover, borrowers must have |
| than the other large banks which includes Wells Fargo, | | | | a minimum of six months of cash reserves in the bank. |
| Chase and Citibank. Experts anticipate the other banks | | | | It is not uncommon for some lenders to require 25% or |
| to follow their lead which could create a welcome | | | | more down payment. |
| stimulant to a hard hit housing market. | | | | Due to differences from lender to lender, borrowers |
| The banks do not have a group of institutional | | | | should search online and compare offers based on |
| investors for their jumbo loan portfolios anymore, so | | | | interest rate and fees for the best deal. While it is true |
| they must keep these loans themselves. However, as | | | | your local credit union may have an attractive rate and |
| more people are looking to save conservatively | | | | low fees at first glance, it could very well be average |
| nowadays, they are using safe investments such as | | | | when compared to online jumbo lenders who do large |
| CDs, and money market instruments. As a result, more | | | | volume and can offer prospects good options. Consult |
| money is coming into the banks so they are beginning | | | | with neighbors, friends, and associates to get a sense |
| to have more funds to lend to borrowers. | | | | of what is available. |
| People in search of jumbo loans, however, shouldn't | | | | |