Jumbo Home Loans for High-Value Homes
Jumbo home loans are the way to finance a purchase with a value above federal standards. The conventional conforming loan limit is $424,100. For a home with a purchase price above this limit, a jumbo loan is needed.
It’s true that a jumbo home loan might be the route to go if you were trying to buy a castle, but in some areas with high housing costs a jumbo loan might be needed to purchase a relatively modest house. Family Finance Mortgage can help the whole spectrum of these customers.
Non-Conforming Mortgages
Jumbo home loans (aka: non-conforming mortgages) are those that exceed the conforming loan limit for the location of the property. A single-unit property in most U.S. counties has a federal cap of $417,000. In higher cost areas that cap starts at $625,500.
General Loan Limits for 2016
The general loan limits for 2016 are unchanged from 2015 (e.g., $417,000 for a 1-unit property in the continental U.S.).
Maximum original principal balance for 2016
| Units | Contiguous States, District of Columbia, and Puerto Rico | Alaska, Guam, Hawaii, and the U.S. Virgin Islands |
|---|---|---|
| 1 | $417,000 | $625,500 |
| 2 | $533,850 | $800,775 |
| 3 | $645,300 | $967,950 |
| 4 | $801,950 | $1,202,925 |
*Maximum Loan Limits for High-Cost Areas for Mortgages Acquired in Calendar Year 2016
2016 high-cost area loan limits have increased for 39 counties due to a high-cost area adjustment or the county being newly assigned to a high-cost area.
*Amounts shown below are maximum limits allowed by the provisions of the Housing and Economic Recovery Act of 2008. The specific high-cost area loan limits are established for each county (or equivalent) by FHFA. Lenders are responsible for ensuring that the original loan amount of each mortgage loan does not exceed the applicable maximum loan limit for the specific area in which the property is located.
| Units | Contiguous States, District of Columbia+ | Alaska, Guam, Hawaii, and the U.S. Virgin Islands |
|---|---|---|
| 1 | $625,500 | $938,250 |
| 2 | $800,775 | $1,201,150 |
| 3 | $967,950 | $1,451,925 |
| 4 | $1,202,925 | $1,804,375 |
+Puerto Rico and a number of other states do not have any high-cost areas in 2016.
Note that the loan limits apply based on the original loan amount, rather than the unpaid principal balance (UPB).
The Advantages of a Jumbo Home Loan
Using a jumbo home loan allows you to avoid making an enormous down payment to reduce your balance to a conforming level. While a higher interest rate usually comes along, the convenience is worth it.
To learn more about jumbo home loans, please contact a Family Finance Mortgage experts. Our team is at your disposal.
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