Jumbo Mortgage Loans refer to all loans that exceed Fannie Mae’s loan limits. Typically, these loans are sold to institutional investors and carry a higher interest rates over conventional loans. These program requires a larger down payment and are more commonly used to purchase or refinance single-family homes or condos.
Jumbo Fixed Rate Mortgages are available in 15-30 year loan terms. They have traditionally been the most popular choice for people who intend to own their property for 7 years or more. Due to the fixed interest rate, the monthly mortgage payment remains consistent over the life of the loan.
Jumbo Adjustable Rate Mortgages (ARMs) are based on a 30-year loan term, with the interest rate adjusting to market rates over the life of the loan. Adjustment periods can range from 1-10 years. These loans are attractive to borrowers who don’t plan to keep their property over the long term and can benefit from a lower initial interest rate. Typically, initial adjustable rates are lower than comparable fixed rates.