Circumventing the Jumbo Loan Blues
Posted by Alerts For Consumers at Tue, 28 Aug 2007 16:32:00 GMT and is filed under Consumer Information 
What are homebuyers and sellers doing to offset the high interest rate attached to jumbo loans?
As the dust begins to settle in the mortgage industry, some sellers and buyers find themselves in a quandary where jumbo home loans are concerned. Jumbo mortgages are no longer deemed as the lending products designed for the excessively wealthy. In fact, jumbos mortgages are loans that exceed $417,000 limit on home purchases backed by mortgage institutions: Freddie Mace and Fannie Mae.
Home sales are forecast to plummet 2.9 percent by the year's end and another 5 percent in 2008. In the interim, homeowners and prospective buyers are making innovative deals to close transactions.
One new trend amongst sellers is the propensity of reducing the asking price to avoid the potential of a steep interest rate, associated with a jumbo loan. In other words, homeowners are trying to ease lending costs and approval for buyers by lowering home prices to fit within a conforming loan.
In the marketplace, mortgage brokers are no longer as lenient as they were year ago no documentation loans. Appraisers are scrutinizing more properties than ever.
Review a few strategies to avoiding the jumbo loan blues:
To avoid the cost of a jumbo mortgage, consider making a higher down payment. A 20-35 percent down payment can not only save you in terms of interest but represents a tax savings.
Opt for a conventional loan and a home equity line of credit. Depending on the value of the home, the asking price and down-payment, it's a plausible mortgage contingency if it works in your financial favor.
Defer the close to lock in a lower rate. It's a risky, stressful way to purchase a new home, this strategy is not bankable.
The easiest way to avoid jumbo loan blues is to bite off only what you can chew. If a weekly salary does not cover the cost of a mortgage, it's most likely beyond your budget. Maintaining financial records, income and assets well organized coupled with paying bills on time will innately ease the pangs of being approved for a jumbo loan.
Categories: > Mortgage, jumbo loan, conventional loan, home loan, home equity
As the dust begins to settle in the mortgage industry, some sellers and buyers find themselves in a quandary where jumbo home loans are concerned. Jumbo mortgages are no longer deemed as the lending products designed for the excessively wealthy. In fact, jumbos mortgages are loans that exceed $417,000 limit on home purchases backed by mortgage institutions: Freddie Mace and Fannie Mae.
Home sales are forecast to plummet 2.9 percent by the year's end and another 5 percent in 2008. In the interim, homeowners and prospective buyers are making innovative deals to close transactions.
One new trend amongst sellers is the propensity of reducing the asking price to avoid the potential of a steep interest rate, associated with a jumbo loan. In other words, homeowners are trying to ease lending costs and approval for buyers by lowering home prices to fit within a conforming loan.
In the marketplace, mortgage brokers are no longer as lenient as they were year ago no documentation loans. Appraisers are scrutinizing more properties than ever.
Review a few strategies to avoiding the jumbo loan blues:
To avoid the cost of a jumbo mortgage, consider making a higher down payment. A 20-35 percent down payment can not only save you in terms of interest but represents a tax savings.
Opt for a conventional loan and a home equity line of credit. Depending on the value of the home, the asking price and down-payment, it's a plausible mortgage contingency if it works in your financial favor.
Defer the close to lock in a lower rate. It's a risky, stressful way to purchase a new home, this strategy is not bankable.
The easiest way to avoid jumbo loan blues is to bite off only what you can chew. If a weekly salary does not cover the cost of a mortgage, it's most likely beyond your budget. Maintaining financial records, income and assets well organized coupled with paying bills on time will innately ease the pangs of being approved for a jumbo loan.
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By Holly Bentz (c) 2007 fruitionMedia
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