Jumbo
loans exceed the maximum conventional loan
amount established by Fannie Mae and Freddie
Mac. They are available as fixed rate mortgages,
adjustable rate mortgages, or negative amortization
mortgages.
These type of loans facilitate the high-end
purchase of expensive homes, vacation homes,
investment property and upscale luxury homes.
They are very attractive for primary occupants
or investors who want to leverage their
assets.
For 2006 jumbo loans are home loans that
exceed $400,000 for single family homes
(amounts are higher in Hawaii and Alaska).
For duplex, the conforming loan limit
for 2006 is $533,850, $645,300 for three-family
residence, and $801,950 for four-family
homes.
Jumbo loans that are sold to investors
on the secondary market are not created
by the quasi-government agencies Fannie
Mae and Freddie Mac.
Because of this, the investors perceive
these loans as a little more risky and demand
a slightly high rate of return. This is
why the interest rates on Jumbo loans are
normally .25% to 1% higher than their conforming
counterparts.
2006 Jumbo loans will start at $418,000
The Jumbo loan limits can change at any
time. To know what the limit is at currently,
call your mortgage broker.
