Super jumbo loans are conventional home loans that exceed $1,000,000 (one million dollars)The majority of super jumbo loans over 2 million dollars require at least two appraisals of the property being financed or refinanced.
Because individuals that can afford homes valued in the millions are generally more savvy and conscientious of where their money is going, they often see the advantages of adjustable rate mortgages and Option ARM's. The home is seen as more than a mere residence, instead it is understood to be income-producing real estate. Thus investment strategies, in the passive sense without going out and buying up investment real estate homes, can be especially realized with homes of great value. Using an Option ARM product that allows for minimal payments so that money can be used in creating more money makes the most financial sense. With loan sizes in the millions the investment payoffs are even greater.
The rate on a super jumbo mortgage is higher because the investor is taking on more risk. The risk of default on a super jumbo loan can more greatly affect the lender's overall portfolio.
Lenders can require up to 2 separate appraisals for these types of loans.
Sometimes you can split the loan up into two separate loans making a first and a second mortgage on the property to accommodate lender requirements.
Many programs exist for borrowers looking for loans over one million dollars. A few of the options are 100% loans, stated income and no ratio options.
Because Super Jumbo Loans are not eligible to be delivered to FNMA or FHLMC, and can only be sold to other investors or held as portfolio loans, they always carry higher interest rates than Conforming loans.
If you are in the market for a super jumbo loan, don't get taken advantage of by paying outrageous fees. A good mortgage professional can advise you on the best way to reduce closing costs on such a large loan amount.
A super jumbo mortgage is a mortgage request exceeding $650,000. A super jumbo mortgage typically has a rate 1/4% higher than your average jumbo mortgage.
Super jumbo loans will always be a little more restrictive on what they require, however funding is always available for any size loan. What sets the lending limits apart for these loans are the higher the amount you wish to borrow, the more restrictive the lending conditions are.
With the rising costs of homes, lenders have expanded their programs to meet the demand. Even with the low start rate Option Arm, you can finance up to 8 million dollars on some programs.
Although some lenders may define these loans as only those above $1,000,000 most lenders use the $650,000 breakpoint for pricing, marketing and underwriting. Remember, the term Super Jumbo Mortgage is used to describe mortgage loans exceeding $650,000 whereas a Jumbo Mortgage refers to loans which simply surpass Fannie Mae's limits for conforming loans. Finding the right loan officer who understands what lenders concentrate on this market is key to finding the right program.
