Jumbo loans are non-conforming, fixed rate loans for purchases and refinances that require larger loan amounts than Fannie Mae and Freddie Mac will allow. Currently, Fannie and Freddie’s “conforming” loan limit is $417,000. If your purchase or refinance requires a loan amount that is $1.00 over that conforming loan limit, you are now in need of a jumbo mortgage. Because jumbo mortgages can be complex and extraordinary, your needs are best served by an experienced jumbo loan specialist like John Moneypenny.

Jumbo mortgages offer you many benefits. Here are just a few:

1. Loan amounts up to $3,000,000 provide you with more borrowing power.

2. SunTrust’s “interest only” option gives you flexibility in your payment options, enhanced cash flow, and a lower monthly payment.

3. Our “No Income Verification” option eliminates the need for us to verify your income. This means that your all-important “qualifying ratios” will be calculated on the income that you disclose on your loan application.

4. Our in-house Automated Underwriting System can determine your loan eligibility quickly and easily. This will save you time, help expand your qualifying ratios, and increase the possibility that the documentation we will need from you will be reduced (AUS eligibility applies to loan amounts less than or equal to $1,000,000).

5. You will enjoy lower closing costs on loan amounts up to $1,000,000 because we only require one appraisal instead of the typical two appraisals.

Because the interest rate on a Jumbo mortgage ($417,000+) is slightly higher than the interest rate on a non-jumbo loan, many clients choose to structure their financing using two mortgages. This strategy involves taking out a first mortgage that is less than the $417,000 conforming loan limit and combining it with a second mortgage to cover the total loan amount needed. For example, if you need a $600,000 mortgage to purchase your new home, you may be better off selecting a $400,000 first mortgage and a $200,000 second. This not only keeps the interest rate lower on the first mortgage, but also may eliminate your need for costly mortgage insurance if your loan-to-value ratio on a single mortgage would be higher than 80%.

Another benefit of this technique is that you will have a wider selection of loan products available to you such as 5/1, 7/1, and 10/1 adjustable rate mortgages that, depending on your projected time frame for keeping this property, may be less costly than the typical 15 or 30 year fixed mortgage.

These are just a couple of crucial items that you need to know about jumbo loans. That’s why you need to work with a professional, jumbo loan specialist who can help you determine which jumbo loan strategy will minimize your costs, maximize your cash flow, and reduce your tax liability.

Author: John N. Moneypenny
Article Source: EzineArticles.com
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