Jumbo Loan Rates Giving You That Losing Feeling?

Jumbo loan rates may leave you with more questions than answers. Exactly what is a jumbo mortgage, who would get one and why? Where did the name jumbo loan originate and are these type of rates different than other types of loans?

Any type of loan that is bigger than what is generally considered a normal type of conventional loan is termed a Jumbo mortgage loan. You may have heard it referenced in the past as a California loan due to it's wide use there to purchase expensive real estate before the recent housing bubble sent home pricing soaring.

The conventional conforming loan limit of $417,000 (or $625,500 in Alaska and Hawaii) as set by Freddie Mac and Fannie Mae are typical types of loans and jumbo loans are those that are above this range however, the recent economic stimulus package temporarily increases the conforming limit to $729,750 until December 31, 2008.

Jumbo mortgages are the types of loans associated with exceptionally high priced homes and, subsequently, also carry higher interest rates. Jumbo loan rates differ from traditional home mortgages only due to the amount borrowed to purchase the home. Jumbo mortgages are facing higher rates and getting harder to obtain. A mortgage interest calculator can help you determine the total cost of these type of loans.

Jumbo type loans are typically made to people with higher income brackets, good credit and good assets. These are usually people who have owned homes before, and are considered good credit risks.

Conventional types of mortgage loans can vary widely and as such jumbo loans are no exception and have just as many variables as well. They may come as adjustable rate, hybrid and fixed rate loans with loan to value ratio's as high as 0.

Loan rates have declined considerably over the years so will you get stuck with a jumbo size interest rate on that jumbo loan. Rates have declined but most likely the answer is still going to be yes. Using a mortgage interest calculator can give you the answer quickly

Running anywhere in the range of .125% to .75% higher than conventional loans, jumbo loan rates can be even high in some circumstances depending on the terms of your loan. For most, these costs are easily absorbed but most people will consider a larger down payment for the better terms of conventional loans.

Jumbo loan rates can be confusing and your best bet is the use of a mortgage interest calculator you can find free to use online. This will give you the best information you need to decide if this type of loan is best for you.