Mortgage Loan ABC - Mortgage Products: The Super Jumbo Loan

Mortgage Products: The Super Jumbo Loan

Super Jumbo loans are an investment tool they're not for the average borrower. Or so we thought. Today, however, thanks to the boom in real estate prices, and the ever declining value of the dollar, more and more average consumers are applying for these jumbo loans, and using them to finance a home purchase.
The most typical area to see the home prices rising to a level that makes a super jumbo loan necessary is in your resort area housing. Many of these homes have escalated tremendously in price over the last couple of years, and the loan needs have risen to all time highs. The super jumbo loan has now become a real mortgage product, not just an investing tool.
Before we get too deep into the real estate market, and the use of the super jumbo loan, perhaps we'd better define this type of loan and the consequences of financing your mortgage in

this manner.
The super jumbo loan is a loan amount that exceeds $650,000 but not more than $10,000,000.00. In fact, this is the defining characteristic of the super jumbo loan. The other "baggage", if you will, that often accompanies these loans, is the large amount of paper work, higher private mortgage insurance, and the higher interest rate. It might also be interesting to know, that Freddie Mac and Fannie Mae, the two largest mortgage buyers in existence today, usually establish these limits, and dictate to many lending companies exactly what they will buy, and how. It should not need to be mentioned that these loans present a bigger risk than the other, traditional loan needs, and therefore must meet some rigorous requirements.
Now, having explained the definition of the super jumbo loan, it deserves to be said that there are alternatives to avoid this type of loan, and still secure the funding you need to purchase a home, without using all your life's savings to do so.
The mortgage loan can be broken down into first and second notes, negating the need for a super jumbo loan, and cutting through all the extra paperwork and interest expense. But, that's another discussion. Another option homeowners have for avoiding the super jumbo loan trap is to simply put enough down on the home to keep the amount financed below a certain level.
To further explain the role Freddie Mac and Fannie Mae play in the determination of the super jumbo loan limits and expense, you need to understand how the mortgage market actually works, and the role these two companies play in that process. Today, if a mortgage company loans you money to purchase a home, you sign a waiver that states that you understand that your loan may be sold to another servicer. They should simply have you sign a form that says you know your loan is going to be sold; who is it? Freddie Mac and Fannie Mae. The mortgage companies find it necessary to resell your mortgage, in order to make another mortgage loan possible. So, quite naturally, they must abide by the rules established by the mortgage purchasing companies. Super jumbo loans can prove quite risky, so Freddie Mac and Fannie Mae don't even purchase these types of mortgages. For the mortgage companies that do, there are set limits, and they require more information, larger proven income levels and adequate private mortgage insurance to assure that the home won't go into foreclosure and auction.
In some areas of the country, there have been increases in the super jumbo loan limits, simply because the housing market and home prices are so high, every home purchased would be a jumbo or super jumbo loan, if the limits weren't extended. Most of these areas are resort homes, vacation homes, and property is scarce.
What is happening today, however, is the growing segment of the population that really needs the super jumbo loan financing in order to buy their home; not make a business investment. What does this say about our real estate market, and the value of the property? Our real estate prices are increasing at an astonishing rate, and right along with that, is the increase in products being offered by the mortgage lenders, therefore, it only stands to reason that we would see an increase in the jumbo and super jumbo loan market. The current estimate for the jumbo and super jumbo loan market is generally around 15%; that is still a pretty large hunk of the mortgage market.

Mortgage Products: The Jumbo Loan
Jumbo loans are an investment tool they're not for the average borrower. Or so we thought. Today, however, thanks to the boom in real estate prices, and the ever declining value of the dollar, more and more average consumers are applying for these...

Interest Only Mortgage versus Balloon Notes
You would think the interest only mortgage and the balloon have nothing in common, but they do; they're closer than the FRM and the ARM in terms of comparative benefits. To fully appreciate the balloon note option, since for many years it's taken...

What about Taxes and Your Second Mortgage?
For the average consumer who has managed to acquire credit card debt, automobile loans, and various other small debts, is the second mortgage loan an answer for the consolidation of debt and a tax reduction? Quite often the answer to this question...

Middle America Goes Upscale on Interest Only Options
Have you ever noticed if given the choice, day average consumer is going to buy as much as possible on as little as possible. Now that's okay if you happen to be buying an air conditioner, or a pair of shoes or a pair of blue jeans; but when it...

Mortgage Products: The Fixed Rate Mortgage
In order to understand the theory behind the fixed rate mortgage, you have to understand the mindset of the mortgage banker and the mortgage borrower of thirty or forty years ago. The Great Depression left a tremendous impression on the minds of...

Mortgage Loan
◦ 5 Scams - Countdown of the most extreme
◦ A Lending Hand - Only Good Credit Need Apply
◦ A Risky Proposition - How You Score Matters
◦ APR, FICO, HELOC - The FAQ's on these Little Initials and More
◦ Asking the Right Questions before Signing a Loan
◦ Balloon Payments Full of Hot Air?
◦ Case in Point - Negotiating Mortgage Points before Signing Anything
◦ Closing the Deal: Plowing through the Mortgage Paperwork
◦ Crossing that Bridge Loan when you come to it
◦ Don't Come in Second when Shopping for Reasonable Second Mortgage Terms
◦ Don't Lose Your Shirt or Your Home - Keep an eye out for crooked mortgage companies
◦ Don't take it personally-What to do when you are turned down for a loan
◦ FICO: Your Personal Financial Score Card
◦ Friends Don't Let Friends Loan Money:
◦ FYI on PMI - General Information on Private mortgage insurance
◦ Give yourself a little Credit:
◦ Glutton for Punishment? Co-sign a Loan
◦ Go for Broker: A Mortgage Broker Can Pay Off for You
◦ Government Grown Loans - The Lowdown on FHA and VA Loans
◦ Highway robbery - How to avoid getting taken advantage of in the loan process
◦ House Rich and Cash Poor - Buying a home that you can afford
◦ How do you Rate? Credit Reports Tattletale on your Finances
◦ In a Fix: Unsurprising Mortgage Payments you can Count on
◦ Kids in College Can Be a PLUS - Parents, Know your Education Funding Options
◦ Lending a Hand: How to Help Family financially but not get taken advantage of
◦ Lying about loans - Legality of using loan money for something other than its purpose
◦ More house than you need? Shop around before signing
◦ Mortgages Can Be Taxing - What You Should Know about Closing Costs and Fees
◦ On the Road Again: Advice about loans for RVs and other recreational vehicles
◦ One size does not fit all - choosing the right loan for you
◦ Owning vs. Renting - The Big Debate
◦ Pay them off - The advantages of paying
◦ Payday Loans REALLY Make You Pay in the End!
◦ Pre-approved for a loan? Don't get your hopes up
◦ Ramifications of Refinancing
◦ Scam is a Four-Letter Word in the Mortgage Category
◦ Score High and Keep Interest Low - The Ins and Outs of Credit Scoring
◦ Shop 'til the Rates Drop - Looking for a Great Mortgage Interest Rate
◦ Speak the same language - Learn the lingo of loans
◦ Study your Options on Student Loans
◦ Take Note of the fine print on your mortgage papers
◦ The ABC's of Amortization
◦ The Lowdown on Loan Options
◦ The Mystery of Mortgages
◦ The Payoff of Student Loan Consolidation
◦ The Pros and Cons of Consolidation
◦ This Option may not cost you an ARM - Consider your Options with Adjustable Rate Mortgages
◦ Upside Down - Avoid Owing More on your Loan than the Value of your Car
◦ When disaster strikes - Find out your options BEFORE something happens
◦ Buying or Selling, is the Mortgage Your Only Option?
◦ Equity and Your Home, A Hidden Asset?
◦ Fannie Mae and the Home of Your Dreams
◦ Financial Planning and Interest Only Mortgages
◦ Government Approved Mortgage Loans
◦ Home Equity Lines of Credit
◦ How Does Fannie Mae Work?
◦ How Real Estate Drives the Interest Only Mortgage Market
◦ How to Shop for Low, Interest Only Mortgages
◦ Interest Only and Credit Card Debt
◦ Interest Only In Your Best Interest?
◦ Interest Only Mortgage versus Balloon Notes
◦ Interest Only Mortgages: A Risky Real Estate Move?
◦ Interest Only Mortgages and the LIBOR, What is it?
◦ Interest Only Mortgages and the Young Professional
◦ Interest Only Mortgages for the Wealthy Investor
◦ Is the 20% Down Requirement Still Alive?
◦ Is Your Credit Working Against Your Mortgage Options?
◦ Middle America Goes Upscale on Interest Only Options
◦ Mortgage Companies: Specialty Guys
◦ Mortgage Interest and Your Tax Liability
◦ Mortgage Products: The 15 FRM
◦ Mortgage Products: The 15 Year ARM
◦ Mortgage Products: The 20 FRM
◦ Mortgage Products: The 20 Year ARM
◦ Mortgage Products: The 30 FRM
◦ Mortgage Products: The 30 Year ARM
◦ Mortgage Products: The Adjustable Rate Mortgage

A Home Mortgage Loan Calculator Helps you Determine Affordability of a Home