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 f=”http://www.truemortgagequote.com”>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.
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Help answer the question about mortgage
How can I become a mortgage broker in california?I simply cannot seem to find legitimate information on becoming a mortgage broker in California. Many of the web sites that purport to have information really share very little of anything and some are just plain frauds. I'd like to find information on mortgage broker training and possibly information on finding a school (preferably Los Angeles) where I can get training on becoming a mortgage broker.
Well what you are talking about is a small percentage of people. I agree, don't bite off more than you an chew. BTW– I don't ever recall house values go down the way they have in recent history. I'll never buy another house again for that reason.
Now, what you fail to realize is that a lot, and I mean a lot of people have lost their jobs due to this housing and gas crisis. These people can no longer pay their mortgages either.
Even if they had a savings, eventually the savings will get spent. There are not any jobs to replace the ones they lost and McDonald's or Wal-mart will NOT pay a mortgage.
It is not all a matter of stupidity, it is a mater of economics and our country is really failing in that department.
*All businesses are being affected with our country's economic crisis, even the ones in California.
Edit–Well sweetxgrace, glad to hear you haven't lost your job….yet.. That really helps to pay the mortgage doesn't it…I hope you remain lucky in that respect. Many other people have not had such luck.
Regardless of your story, breaking the law is breaking the law. If a person does not respect THAT law, how can they be trusted to respect ANY laws? Why should amnesty be given for those who broke the law by coming here illegally? We don't give amnesty to murders and thieves, we send them to jail.
there is a mistake in your presentation, $1M at 10% means you have to pay $1.1k. If you make a credit on 10 years it means each year you have to pay 110.000$
I think why the mortgagor bank doesn’t do the whole process rather than pass it to the investment bank is because it wants to make the mortgage under a separate entity that has its own credit rating, so the rating will be higher than the mortgagor rating itself. Am I right?
thanks
@speculatorMan not really. What Sal is saying is that when you take out an interest only mortgage you don’t pay any of the capital back until the end of term (which in this case is 10 years) and so every year you pay back the interest on the $1m that you borrow which is $100k. This means you pay back $100k every year for the 10 years but then at the end of the term you still need to pay the amount you originally borrowed so the payment in year 10 is $1m + $100k. Hope this helps.
Honestly there is no way to know. I manage at the national headquarters of Midwest's largest privately held mortgage bank and we have no idea what is going to happen with rates. While you are correct that you will soon have a conforming loan, we are anticipating a tiered rate structure amongst the major end investors. I would not be surprised to see a new subset of rates that falls between conforming and jumbo. 6.125% is not a horrible rate in this market for a fixed, jumbo product.
If you have further questions feel free to email me, unlike most people who answer questions on here I actually know what I'm talking about and have the credentials to back it up.
Edit: I just recieved this email from an answerer that I will not name
"unlike most people who answer questions on here I actually know what I'm talking about and have the credentials to back it up."
Granted there are a bunch of idiots and kids but pardon me for stepping on your holy feet YOU ain't the only one with credentials that far out weight yours.
_______________________________________________
It's ok to disagree with me, but if you are going to do so please at least use proper english! Ain't and out weight…HA!
People talk about this all the time. The problem is that you cannot refinance unless you have sufficient equity in you house. This has always been the issue.
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What the hell?
I really hope that is homework or something, in any case I like the advice "Use the internet"
It's extremely important to understand that with a little time and the right approach getting the absolute best mortgage refinancing is not a huge problem.Companies/businesses that arrange financial products of this nature<!–usually are very profitable and it's a good idea to remember where all the money is generated from. You, the customer are the root of their profits.
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http://best-loans.awardspace.com/homeloans.htm
Once you need to finance the buying of your own home with a mortgage, it's very important that you do your research properly and understand all of the variables. When it is essential that you get the absolute best mortgage refinancing–>enter into some research and groundwork on your own because the Internet can equip you with an absolute pot of gold of very helpful data when it is essential that you get the best mortgage refinancing.
The 200,000 will not affect the interest, but should be added for the total that was paid for the house. for simple interest the formula is:
For simple it is
PV(1+i)^n
802,338(1+.075)^30
For compund it is
P(1+r/n)^nt
n is the number of periods per year. I will assume monthly interest, so 12.
802,388 (1+.075/12) ^12*30
Then add 200,000 for the total cost
Hope this helps.
@speculatorMan yea thats what i thought too…can someone clarify?
in the beggining sal says that you will pay $100k per year, so in 10 years it will result in $1M
shouldn’t it be $110k per year to result in $1.1M in the end of those 10 years?(110k x 10 = 1100k)
R we only capable of passing greed laws at this point. I want a mortgage that is adjustable. Adjustable to fair market value. My grandfather took out a loan 50 years ago to start a business. They gave him ten years to repay it. He repaid it in one year. The next year he bought a house free and clear. To all the BMW driving pinto owners, your getting what you bought. Insecurity. I want what I pay for.
NetBasis and cost basis reporting on Money For Breakfast…new tax legislation in 2011 – you will all be accountable for accurate cost basis reporting