Jumbo loans are above the maximum loan amount set by Freddie Mac and Fannie Mae. They have a little higher rate than conforming. Jumbo loans are securitized by other institutes than Freddie Mac and Fannie Mae. Jumbo loans are proves to be more riskier to lenders because as the loan limits are very high and if the borrower defaults on the payment, it will be difficult for the lenders to sell luxury homes at high prices.
Due to high risk associated with Jumbo loans, lenders prefer higher down payment from the borrowers. Interest rates charged on a jumbo loan is usually higher than a loan that is conforming. Refinancing a jumbo loan can be costly due to high closing cost. You should seek advice from different authorized lenders about jumbo loans, before applying for it.
No comments:
Post a Comment