Jumbo Mortgage Market Is Returning

There have been a lot of headlines about this of late and I have included some of the articles on this in my Blog.  A Jumbo Mortgage is any loan amount above the Conforming loan limit for Fannie Mae and Freddie Mac which is typically $417,000.  The reason many want to avoid getting a Jumbo Mortgage is because the interest rates are higher. 

There are temporary loan limits for certain counties that can go higher than that.  If you would like to see what the loan limit for your county is you can go to https://entp.hud.gov/idapp/html/hicostlook.cfm.  If you get confused feel free to email me and I can look it up for you.  In Broward, Miami-Dade, and Palm Beach Counties the maximum loan limit for a Conventional mortgage is $423,750. 

The biggest change for the United States Jumbo market is that rates have improved because there is now an appetite for these types of mortgages.  Most of these loans require at least 20% down.  In the harder hit areas such as South Florida most banks will require 35% down because it is considered a declining market.  Luckily I have a few banks that we deal with that will allow less money down in South Florida and for some loan amounts up to $2 million with only 20% down depending on the strength of the loan. 

A big reason interest rates are higher on Jumbo Mortgages is because there isn’t really a secondary market for them right now and banks have to portfolio, keep them in house, them.  There was a test bond for Jumbo Mortgages that attracted a lot of attention and did well so this could really help to jump start the luxury market even more.  Only time will tell.