30 year Jumbo Mortgage
Nov 11, 2008 Jumbo
Fannie Mae and Freddie Mac set loan limits that are pegged at $417,000 in the U.S. and $625,000 in Alaska, Hawaii and the U.S. Virgin Islands for the year 2007 alone. A loan that exceeds these standard limits is called a 30-year jumbo mortgage, which usually has a relatively higher interest rate than smaller mortgages. For instance, a borrower who loans a 30-year jumbo mortgage given the standard average would have to pay $3,032.65 each month. To date, the highest rate of a 30-year jumbo mortgage was pegged at 10.500 percent while the lowest figured at 5.375 percent.
It is also important to note that a 30-year jumbo mortgage has two defining elements: a 30-year maturity period and a maximum loan size that exceeds that of Fannie Mae and Freddie Mac. The reason why such kind of loan carries higher interest rates was because these two government-chartered institutions do not support jumbo mortgages.
Just recently, jumbo mortgage rates are cut by about half of a percentage point on jumbo-conforming loans, which can be guaranteed by Fannie Mae and Freddie Mac. The criteria for obtaining a jumbo-conforming loan are still difficult though. Both Fannie Mae and Freddie Mac usually call for higher credit scores, reliable documentation, and larger down payments.
Home buyers who wish to qualify for jumbo-conforming mortgage at such a lower rates are still having a difficult time of paying for the 10 to 15 percent down requirement, which may only discourage mortgage borrowers.
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