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Jumbo Mortgages
A Jumbo Mortgage is a mortgage with a loan amount above
conventional loan limits. Jumbo Mortgages apply when Fannie Mae (FNMA) and Freddie Mac (FHLMC) limits don't cover the full
loan amount.
Fannie Mae and Freddie Mac are large agencies that purchase the
bulk of residential mortgages in the U.S. They set a limit on the maximum dollar value of any mortgage which they will
purchase from an individual lender.
Currently, this limit is $417,000. This leaves a portion of the
market to look elsewhere for placement. Other large investors, such as insurance companies and banks, step in to fill the
need with maximum mortgage amounts going to the $1 million or $2 million range.
The average interest rates are typically greater than normal for
conforming mortgages, and vary depending on property types and mortgage amount.
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