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  • Jumbo Loans

  • A Jumbo Loan is a type of loan that exceeds the standard limits for conforming loans.  A conforming loan meets certain guidelines as set forth by Fannie Mae and Freddie Mac. The best-known of these guidelines is the size of the loan; in most counties in the United States, the current maximum size of a conforming loan is $417,000.  Jumbo loans are too large to meet the guidelines of a conforming loan.  For example, if you are buying a home in a county in which the conforming loan limit is $417,000, and you are taking out a single mortgage for $500,000, you'll need a jumbo loan.  Jumbo loans may have a fixed or an adjustable interest rate.

    There are many advantages and disadvantages when dealing with jumbo loans.  Jumbo loans gives borrowers the opportunity for a loan that may not qualify for a conforming loan.  Jumbo loans are commonly used for luxury homes, as well as second homes.  It also simplifies home buying by allowing you to avoid taking out two or more loans.  Unfortunately jumbo loans are more difficult to sell on the secondary market so most lenders will offset their financial risk by charging the borrower a higher interest rate than conforming and conforming high-balance home loans.  They can also have stricter underwriting and larger down payment requirements. 

    Here at Allied Pacific Financial, we have a special division that deals strictly with high balanced loans. If you would like to learn more about jumbo/high balanced loans and how they work, we would be happy to discuss this with you.