Jumbo Loan Information

     A mortgage loan over $322,700. The significance of this cutoff is that mortgages above this dollar amount do not conform to the guidelines of Fannie Mae or Freddie Mac are government sponsored entities that work with banks to make mortgage loans. There are generally only two types of situations where banks will make jumbo loans: either the bank is a large bank prepared to hold the loan for it’s entire life (most banks immediately resell mortgages to other banks after closing) or the bank has already entered into an agreement to resell the loan or loans of certain size and meeting certain credit criteria to a larger bank. Note that the cut off for a ‘jumbo loan’ is set at $322,700 per Fannie Mae and Freddie Mac’s criteria, individual banks may elect to use trade terms to refer to large loans and may call loans below this figure jumbos. Default risk on jumbo loans is generally lower than that of most mortgage loans.

Do not make assumptions. If you are unsure about anything...
ASK YOUR MORTGAGE COMPANY QUESTIONS!

1. Inquire about all fees and costs associated with this loan, including the jumbo loan interest rate and APR (annual percentage rate). 

As with any residential home loan....

2. Do not assume that the interest of this loan will be tax deductible. Consult a qualified tax advisor for potential tax benefits.
3. Be sure to ask if there is a pre-payment penalty (prohibited by law in some states) for paying off the loan too early or making substantially large payments against the principal.