A jumbo mortgage is different than a conforming loan. A jumbo loan amount exceeds that limit set by FNMA. That limit may change every year, but is around $300,000. With a jumbo mortgage, the interest rate is a little higher than other similar mortgage loans that are for smaller amounts. The reason the rate is higher is because the loan has a perceived higher risk by lenders.
A jumbo loan is considered a non-conforming loan. Conforming mortgage loan programs have perceived less risk by lenders and have lower interest rates. Most mortgage loans that are done by lenders are conforming loans. Jumbo loans are a small percentage of the mortgages that are done.
Although most mortgage loans that are done in the US, are smaller loan amounts than those limits set by Fannie Mae and Freddie Mac for jumbo loans, in California, home prices are so high, that there are many jumbo home loans done there.
If you live in California and/or are looking to get approved for a jumbo loan, the internet is a grand place to apply to get a jumbo loan for a few reasons. First of which is that there are so many lenders online competing for your business, that lenders are forced to offer their lowest possible rates in order to get your business. For example, a local broker, who has a steady client base, can not be motivated to offer the lowest rate or the lowest closing costs, when the competition is only local. However, when you have the largest group of lenders online competing for your business, you can get a much better offer.
Where is the best place to apply for a jumbo loan? There are many mortgages companies online who might
provide you quotes from multiple lenders. These businesses
will be able to provide you with quotes for usually up to 4 different lenders. This is a efficient way to build sure to get competitive offers. However, build sure you still inquire of
each competing mortgage lender about the points they will charge, their closing costs and any other fees, to contruct
sure you are taking the best loan you can.
Getting the lowest interest rate does not always build the loan you want, the best deal. The lender may charge more in other places that you might not catch until closing.
