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Monday, May 28, 2012

Jumbo Loans

Jumbo Loans

If you are looking to purchase a home in Manhattan, Brooklyn or Long Island that is $625,500 and higher you have reached what Fannie Mae and Freddie Mac have set as the maximum loan amount for a conventional or conforming loan. While this is still higher then the typical conforming loan limit of $417,000, we all know there are many homes that are over those limits in Manhattan, Brooklyn and Long Island. That’s where jumbo loans or non-conforming loans come in. A jumbo loan is a loan for anything above the limits set by Fannie Mae and Freddie Mac or $625, 500.

Since jumbo loans go above those loan limits there are more challenges then a typical conventional loan. The main reason Fannie Mae and Freddie Mac were created was to give lenders confidence in lending since the money they lent out was covered. That’s why things can get complicated if you are looking to purchase a higher priced home, or a home over $625,500, because now the lender is obligated to lend its own money to fund the loan.

There a few key points you need to watch out for if you are looking into a jumbo loan. First because lenders don’t have the back up of Fannie Mae and Freddie Mac the mortgage rates tend to be higher then with conventional loans. Also since jumbo loans are riskier fewer lenders are likely to do them which could delay the closing of the loan not to mention the potential of shopping around all over town to find the right lender.

This is where I come in, as senior loan officer I have the experience and knowledge to get you the most competitive jumbo loan rates with the best terms available for your situation. I have access to many different lenders which saves you the process of having to contact multiple lenders.