Wells Fargo Home Loans / Jumbo Mortgages

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Jumbo Mortgages
Looking for a plus-size mortgage? Whether you're buying a home or refinancing, if you need to borrow more than $417,000*, a jumbo or blended jumbo mortgage may be your best option. Jumbo mortgage programs can give you the extra borrowing power you need, but the costs and guidelines may differ from those that apply to standard mortgage loans.
Because of their size, jumbo mortgages are "non-conforming" loans. This means that they do not conform to the standard underwriting guidelines set by Fannie Mae and Freddie Mac, and therefore cannot be handled in the secondary market by these two industry giants. For 2007, the conforming loan limit was set at $417,000 for single-family residences in the continental U.S. This limit is adjusted annually.
Do jumbo mortgages cost more?
Jumbo mortgages usually carry a higher interest rate than conforming loans. Because of the larger loan amount, and because the loan can't be guaranteed by Fannie Mae or Freddie Mac, the lender absorbs a greater degree of risk. Also contributing to the lender's risk is the fact that homes secured by jumbo mortgages may be more difficult to sell than less-expensive homes.
Is there an alternative?
If the higher interest costs make jumbo mortgages unappealing, but you still need to borrow more than the conforming loan limit, you do have another option. One relatively common variation of the jumbo loan is known as a "blended jumbo" mortgage. This financing method allows you to take out a fixed-rate mortgage up to $417,000, along with an adjustable-rate second mortgage to cover the difference. The resulting "blended" payment is often lower than what would be required for a jumbo mortgage of the same total amount.
While the lowest possible dollar amount of a jumbo loan is uniform among lenders, the highest possible amount is not as distinct. Different lenders are willing to absorb different levels of risk, and establish their own "ceiling" for jumbo mortgages. In addition to differentiating between conventional and jumbo loans, many lenders have a separate category for "super-jumbo" loans. Where the line is drawn between jumbo and super-jumbo, and how the costs and loan requirements differ, also depends upon the lender. Before you apply, ask what category your desired loan amount fits into.
Jumbo mortgages are among the wide variety of products offered by Wells Fargo Home Mortgage. For more information on jumbo mortgages, or for answers to any of your home financing questions, contact one of our mortgage professionals today.

Contact: Randy Ascher at 631-943-6340
E-Mail: randy.ascher@wellsfargo.com
Web site: www.RandyMortgage.com

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