FAQ

What is a jumbo mortgage?

A jumbo mortgage is commonly known as a mortgage in an amount in excess of Fannie Mae and Freddie Mac conforming loan amounts. These limits are set each year based upon national housing prices. The current conforming loan limit is $417,000 for most parts of the country.

What is a “super jumbo” mortgage?

There is some misunderstanding around this term as some lenders and borrowers use “super jumbo” interchangeably with “jumbo”. A true “super jumbo” mortgage is one in an amount in excess of $650,000

Are jumbo mortgage rates higher than conventional loan rates?

The simple answer is typically “Yes”. Because these loans cannot readily be sold on the secondary market through government agencies and also involve higher-end properties that are less easily sold, they are typically offered at higher rates to compensate for this risk. The spread between conforming and non-conforming loans can vary widely based upon the market environment, but typically ranges from .25% -1.00%. You can obtain a quick rate quote by completing the electronic form on the home page. Your request will be compared to what is offered by several lenders and the best rate and terms will be communicated to you.

How much of a down payment is required on a jumbo loan?

This really depends upon the property being purchased and the loan amount. Jumbo loans today may require as little as a 10% down payment, but larger loan amounts may require down payments of up to 35% or more.

Is “PMI”, or “private mortgage insurance required”?

These loans are “portfolio” loans so they typically will not require private mortgage insurance which can typically bridge the interest rate gap between lower rate conforming loan programs that require PMI and jumbo mortgages that do not.

Is it better to use my bank for a jumbo loan, or go through a mortgage broker?

This depends upon the rate and terms offered by your bank. A mortgage broker has the ability to shop around to multiple lenders in order to find the one that offers the best rate and terms for your needs. Your bank will be limited to the rates and terms offered under their lending policies. 

What are the costs involved in a jumbo mortgage loans?

The costs involved in a jumbo mortgage loan are largely the same as those required by any other mortgage. Some costs are variable, like title insurance, and will move up as the loan amount increases. Others, like an appriasal or survey, might be a little bit higher, but are fairly standardized. As with any mortgage, you should expect to pay roughly 3% of the loan amount in closing costs. 

How difficult is it to refinance a jumbo mortgage loan?

Virtually no different than it is to refinance a conforming loan. Borrowers should keep in mind that lending and credit standards have tightened over the past two years and the requirements to qualify to refinance may be more stringent than they were when your loan was originated. In addition, the State of Texas limits cash-out refinances to 80% of the market value of the property.