Q: What should a homebuyer know before jumping into a jumbo mortgage?
A: A jumbo mortgage is any loan that falls above the $417,000 range. The difference between a regular conventional loan and a jumbo loan is the $417,000 price point. If you qualify for a jumbo loan your interest rate is inevitably going to be higher than it would be had you just gone with a traditional loan under the amount of $417,000.
Jumbo loans are offered all the time. Here is a perfect example of a jumbo mortgage situation. I have a client right now who is actually purchasing a home. The property in which they are interested in falls within the mid-five million dollar range. What this homebuyer is doing is not putting 50 percent down, or what have you, which is generally the minimum requirement by a lender. They are actually putting down more to get to that $417,000 dollar price point to avoid a higher interest rate. The bottom line is that, if you get a jumbo loan you are going to pay a higher interest rate than you would be on the conforming.
— Brad Fleming, Better Homes and Gardens Gary Greene Realty, 713-240-6200
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