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Jumbo Loans: Getting Approved Getting approved for jumbo loans in today 鈥檚 market can be a little different than it was just a couple of years ago. But that doesn 鈥檛 mean that it is impossible, it just means that you want to work with someone who knows what they are doing when it comes to jumbo loans. Depending on where you live in the country, a house that costs more than $400,000 can be a basic starter home. Which makes many people ask 鈥渨 hy is the $417,000 the cutoff for regular mortgages and anything higher than that is considered a jumbo loan?鈥? The answer to that question is quite simple: Fannie Mae and Freddie Mac, two government sponsored mortgage entities set the limit each year for what the 鈥渞 egular 鈥?loan limits are 鈥?and anything above that number is considered a jumbo loan. The highest loan amount for a 鈥渞 egular loan 鈥?is often called the conforming loan limit, and is announced by Freddie Mac and Fannie Mae each January. This year, the conforming loan limit announced by both Fannie and Freddie for single family residences is $417,000. Any loan that is above this loan amount is considered a jumbo loan. Jumbo Loans: What To Expect Whenever you are shopping for a jumbo loan, you will notice that the jumbo loans that you can get typically have a slightly higher interest rate than a conforming loan. But, when you compare a jumbo loan with a conforming loan, you can find that the jumbo loan products can offer a wider range of flexibility when it comes to loan program and what kind of payment a jumbo loan borrower wants. Generally speaking, jumbo loans programs can either be fixed or adjustable and may have an interest-only option available. Because jumbo loan programs change every day, it is important to speak with a jumbo loan expert who can understand your current financial situation as well as what you are trying to accomplish and then help you find the best jumbo loan program available. Jumbo Loan Limits Extended Until 2011 Jumbo loan limits have been extended through September 20, 2011 鈥?and although there was some speculation as to whether or not the US Congress would pass the bill, they passed it. The conforming loan limit will still be a maximum of $729,750 in areas that are designated 鈥 渉 igh cost 鈥 ?and anything over that will be considered a nonconforming loan, or a jumbo mortgage, and runs the risk of having a higher mortgage interest rates. There was some speculation that Congress would not pass the extension of the conforming loan limit and it was expected that they may retreat back to $625,500 after Dec. 31, 2010. But with the recent extension, at least through 2011 the jumbo loan limit will be the higher amount ($729,750) Corbin Olsen Realtors Happy About The Jumbo Loan Limits Extension Realtors in all areas of the country were excited about the higher loan limits 鈥?particularly those Realtors who are in high-cost areas like California. 鈥淲 ithout the extension of the higher loan limits, many California borrowers would have a harder time refinancing homes and obtaining financing for new home purchases,鈥?said CAR President Steve Goddard.
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