financing larger homes
Jumbo Loans are non-conforming loans that exceed the loan amounts as set by Fannie Mae and Freddie Mac. These two stock-holding companies establish maximum loan amounts, income requirements, down payment requirements, and type of suitable properties.
Loans Have Higher Loan Balances
the loan balance for jumbo loans are above the maximum loan amounts established by Fannie Mae and Freddie Mac thus jumbos are "non-conforming" loans. Jumbo loans are used to buy large, expensive homes.
Jumbo Loans Have Higher Interest Rates
the interest rates on jumbo loans are generally higher than rates on conforming loan. The fixed rate can range anywhere from 0.11 to 0.77 points higher, depending on the region. Adjustable rates are 0.01 points higher, but tend to narrow as the ARM adjusts.
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