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Jumbo
Mortgages
The current Conforming loan limit is
set at $359,650, any loan amount above that figure is considered
a Jumbo Mortgage. Jumbo Mortgages are often subject to an
interest rate pricing premium as well as additional underwriting
restrictions. A common strategy to lower overall interest
costs, if your purchase or refinance balance is above $359,650,
is to use a combination of both first and second trust money,
referred to as an 80/10/10 or 80/15/5. Every situation is
different and this is one more option to consider when your
purchase or refinance balance falls into the Jumbo Mortgage
category. Another option
to consider for financing an Interest Only Jumbo Mortgage is the
Smart
Choice Loan. The Smart Choice Loan does not have a pricing
adjustment for the borrower if the loan amount exceeds $359,650,
as would a standard Jumbo Mortgage. Smart Choice Loans have a 1.00% Introductory
Rate on a loan amount up to $1,000,000. The Smart Choice Loan
offers four different payment options that would be available
for your Conforming and Jumbo loan sizes. For example a
$650,000 mortgage would have the following payment options each
month:
-
Minimum Payment
$2,090.66
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Interest Only Payment
$2,708.33
-
30 Year Payment
$3,489.34
-
15 Year Payment
$5,140.16
The principal
and interest payment on a traditional Jumbo Interest Only LIBOR
ARM at an interest rate of 5.75% with a loan amount of $650,000
would be $5,397.67. Each of these mortgage programs have their
benefits, however, the Smart Choice Loan provides the most
flexibility with the most payment options for any Jumbo Mortgage
borrower.
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