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    • What is a jumbo mortgage and when do you need one?

      Home prices have shot up in some areas of the U.S. to the point where buyers need jumbo loans to finance them. In mortgage speak, jumbo refers to loans that exceed the limits set by the government-sponsored enterprises that buy most home loans and package them for investors.

    • What are the benefits of a jumbo mortgage?

      The main benefit for borrowers is that a jumbo mortgage allows them to go outside of Fannie and Freddie limitations. You can still get a competitive interest rate and finance the home of your choice without being restricted by the dollar limit on conforming mortgages.

      The rates on jumbo mortgages fluctuate and may be higher or lower than the conforming mortgage rate. Recently, a 30-year jumbo rate was 4.62 percent, 8 basis points lower than a conventional 30-year fixed rate of 4.71 percent.

      Jumbo loans are a convenient way to finance property. Instead of getting two conforming loans to finance a home, the jumbo option eliminates that need. Some borrowers prefer to finance more of the home’s cost rather than tying up cash, making the jumbo mortgages a helpful financial tool.