Jumbo Loans for Home Mortgages
A Jumbo loan, also known as a Jumbo Mortgage, is a type of financing that exceeds the limits set by the Federal Housing Finance Agency (FHFA). It is essentially a non-conforming loan that allows a borrower to purchase or refinance a high value property.
Unlike conventional mortgages, a Jumbo loan is not eligible to be purchased, guaranteed, or securitized by Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Morgage Corporation). Jumbo mortgage loans are designed to finance luxury properties and homes in highly competitive local real estate markets. Jumbo mortgage loans come with unique underwriting requirements and tax implications.
Typically to secure a Jumbo home loan, a borrower must have a high credit score, healthy financial reserves and a 20% down payment.
Conventional Home Mortgage Loans
A conventional mortgage is a mortgage in which the underlying terms and conditions meet the criteria set out by Fannie Mae and Freddie Mac. Approximately half of all mortgages issued are conventional mortgages. Or, to put it another way, We guarantee and/or purchase about half of all mortgages.
Types of Conventional Mortgages
Conventional loans can be either Fixed or an adjustable rate. Fixed-rate mortgages have a set interest rate for the entire length of the mortgage term which can be between 10 and 30 years. An adjustable-rate mortgage (ARM) has a term of 30 years with a low introductory rate for a fixed period followed by periodic adjustments according to a specific benchmark, typically a specific LIBOR or a T-Bill index.
Non-Conforming Mortgage Loans
A non-conforming loan is a home loan that does not conform to the underwriting guidelines set forth by the government-sponsored enterprises Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation).
These types of loans are typically offered to borrowers who do not qualify for conforming loans. While its good to have this type of home loan as an option, the downside is non-conforming mortgages typically have higher interest rates and may carry some additional fees and even some additional insurance requirements. In other words, they are typically more costly.
What is an Adjustable Rate Mortgage?
An adjustable rate mortgage or ARM for short, is a type of mortgage loan that can be adjusted at pre-set intervals. An ARM is usually initially fixed for a set period of time, followed by periodic adjustments according to a specific benchmark.
How Adjustable Rate Mortgages Work
The initial rate and payment amount on an ARM will remain in effect for a limited period ranging from just 1 month to 5 years or more. With most ARMs, the interest rate and monthly payment change every month, quarter, year, 3 years, or 5 years. The period between rate changes is called the adjustment period. For example, a loan with an adjustment period of 1 year is called a 1 year ARM, and the interest rate and payment can change once every year.
What Is Cash-Out Mortgage Refinancing?
A cash-out refinance replaces an existing mortgage with a new loan with a higher balance, sometimes with more favorable terms than the current loan. The difference between these two loans is provided to the homeowner as cash.
A cash-out refinance differs from a traditional mortgage refinancing, which simply replaces your current loan with a new loan that has a new set of terms and in many cases, a lower interest rate.
A cash-out refinance also differs from a home equity line of credit (HELOC), which allows you to borrow cash using the home-equity as collateral. HELOCs function as a second mortgage, with the borrower withdrawing and repaying funds on a more flexible schedule, and the government allowing a tax deduction for interest payments. Unlike traditional first or second mortgages, a HELOC interest rate is not fixed; the rate varies from month to month with the prime rate.
Investment Property Loans
Investing in a property is a great way to make passive income or provide a vacation home for your family. I can help make your property investment goals a reality by providing the right financing to get you started.
An investment loan is for a single-family, townhome, condo, or multi-unit property that has been purchased with the intention of earning a return on the investment, either through rental income, future resale or both.
For those interested in buying an investment property, I offer loans to fit your unique needs.
VA Home Loans
A VA loan is a mortgage loan available through a program established by the United States Department of Veterans Affairs. VA loans assist service members, veterans, and eligible surviving spouses to become homeowners. The VA sets the qualifying standards, dictates the terms of the mortgages offered and guarantees a portion of the loan. VA home loans are provided by private lenders, such as banks and mortgage companies.
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