If you are looking to get a mortgage and you have qualified for more than $400,000, then it is important that you understand the different loan products. One loan product that you might need to consider is the “jumbo mortgage loan” and how it is different than a “conforming loan.”
What are Conforming Loans?
In order for you to understand how jumbo mortgage loans works, it is important to first know how a conforming loan works. With conforming loans, the mortgage is designed to meet the guidelines that are set by Fannie Mae and Freddie Mac. These limits have changed quite a bit, especially since the mortgage crisis occurred. Most mortgages are conforming loans.
Typically, these conforming loans are cheaper, but there are certain situations where a larger loan might be needed. If you are looking for a loan between $417,001 and $625,500, then it will usually fall within the “jumbo loans” category, with a few exceptions based on the state you live in.
What are Jumbo Mortgage Loans?
Jumbo mortgage loans are any loans where the loan amount is between $417,001 and $625,500. Jumbo mortgages don’t fall within the standards set by Fannie Mae and Freddie Mac, and consequently don’t have a government guarantee. Which means the qualifications and requirements by the lender may be more strict or just more thorough. Often, these mortgage rates are higher than a conforming loan, but the exact rate depends on the market trends. For example, if there is a strong investor demand for jumbo loans, then you will likely be able to get a more favorable rate.
It is important to know that anything equal to or more than $417,001 falls into this “Jumbo” category. If you have a home loan amount at $416,000 and they roll in $1,001 in costs or prepaids then the loan will automatically be a jumbo loan because the combined total will be $417,001.
Can I get into a Jumbo loan with my VA loan benefits?
If you qualify for a veteran’s loan (or VA home loan) and you are looking to get into a “Jumbo” you can use your VA benefits. The best way to get the optimal interest rate and loan terms for your individual situation is to work with a VA mortgage professional who specializes in VA loans and offers jumbo loans.
To learn more about the options that are available for a VA Jumbo Loan, you should talk with a VA mortgage professional and discuss your personal qualifications.
United Services Veterans Mortgage specializes in VA Home Loans and offers Jumbo Mortgage Loans.