A jumbo mortgage is a home loan that exceeds the conforming loan limit, the maximum loan amount that Fannie Mae and Freddie Mac will accept.
In Ohio, any mortgage that exceeds $417,000 is considered a Jumbo Mortgage.
The mortgage meltdown scared many lenders away from offering Jumbo Mortgages, but now that the economy is recovering lenders are slowly beginning to provide access to Jumbo Mortgages in Ohio.
Is a Ohio Jumbo Mortgage right for you?
Maybe, maybe not. A number of things go into determining what mortgage best fits your needs. A few things to remember when considering a Jumbo Mortgage in Ohio are,
- Jumbo mortgage rates will be anywhere from a 0.50% to 0.75% higher than a conforming mortgage.
- There is no Private Mortgage Insurance available for Jumbo Loans, thus the underwriting criteria is somewhat stricter.
- Jumbo Mortgages usually need 10-20% down payment, if not more.
- Most lenders will impose a hard cap on your debt to income ratio.
Are there other options instead of taking out a Jumbo Loan?
Sure. One that is commonly used is taking out a $417,000 first mortgage, to stay under the conforming loan limits imposed by Fannie Mae and Freddie Mac. You can then take out a 2nd mortgage, Home Equity Line of Credit or Fixed Rate second mortgage, up to 90% of the purchase price/appraised value. This allows you to get a better rate on the 1st mortgage. Obviously this option could potentially be restricted by the purchase price. For instance, if you were purchasing a $1,500,000 home, and you take out a $417,000 first mortgage, you would then be looking at a $933,000 2nd mortgage. Probably not the greatest idea.
If you would like to discuss your options for a Jumbo Mortgage, complete the simple, no obligation (no social security number required) rate quote form, or Contact Me.
