In the United States, a jumbo mortgage is a mortgage loan that may have high credit quality, but is in an amount above conventional conforming loan limits. This standard is set by the two government-sponsored enterprises, Fannie Mae and Freddie Mac, and sets the limit on the maximum value of any individual mortgage they will purchase from a lender. Fannie Mae (FNMA) and Freddie Mac (FHLMC) are large agencies that purchase the bulk of U.S. residential mortgages from banks and other lenders, allowing them to free up liquidity to lend more mortgages. When FNMA and FHLMC limits don’t cover the full loan amount, the loan is referred to as a “jumbo mortgage”. Traditionally, the interest rates on jumbo mortgages are higher than for conforming mortgages, however with GSE fees increasing, Jumbo loans have recently seen lower interest rates than conforming loans.
Conventional loans, which are the most common kinds of loans, have a loan limit of $417,000 in most of the U.S. For some home buyers, that is not enough to purchase their new home. Those buyers need to look into a jumbo loan to meet their needs.
While other mortgage lenders are still shying away from jumbo loans, HRM is pleased to offer four types of Jumbos. Jumbos are great for move-up buyers with expanding families, those looking for a bigger home or current homeowners who want to take advantage of low rates!
- Jumbo 1 offers a 30-year fixed rate along with a 3/1, 5/1 and 7/1 Treasury ARM with loan amounts up to $3,000,000.
- Jumbo 2 offers a 30-year fixed rate along with a 5/1, 7/1 and 10/1 Libor ARM with loan amounts up to $3,000,000.
- Jumbo 3 offers 30- and 15-year fixed-rate terms along with a 3/1, 5/1 and 7/1 Libor ARM with loan amounts to $3,000,000.
- Jumbo 7 offers a 5/1 and 7/1 Libor ARM with 10-year interest-only option and loan amounts to $3,000,000. Primary and second homes permitted.
- 90% LTV for primary residence, up to $850,000 (680 FICO)•85% LTV for primary residence, up to $1M – NO PRIVATE MORTGAGE (740 FICO)
- 80% LTV for primary residence, up to $1.5M
- 70% LTV for second home, up to $1M
- Eligibility up to $3M
- Single appraisal only, for up to $2M
- Minimum 6-month PITI reserve
- Allowance of up to 9% seller contributions
- No restrictions for first time homebuyers
- Cash-out refinancing may be available.
- Second homes and condos may be eligible.