Jumbo Loans and Mortgage Calculators

Loans above the maximum loan amount established by Fannie Mae and Freddie Mac are known as jumbo loans.  Because jumbo mortgages are a smaller market than conforming loan amount markets and are not generally purchased or guaranteed by Fannie Mae or Freddie Mac, they often have a higher interest rate than conforming loans.  As the credit market tightens and the US economy changes, the spread between the two loan types can vary significantly.  Before using a mortgage payment calculator for jumbo loans the user should make sure to check the interest rate being offered on today’s market to assure the data entered into the mortgage loan calculator is accurate.

Jumbo mortgage loans are not only less liquid but are also a higher risk for mortgage companies.   This is because they are in fact fewer jumbo loans, fewer loans resold and marketed, and if a jumbo mortgage loan defaults, there is more at risk financially.  High end  homes that are usually the market for jumbo loans are normally more vulnerable to market highs and lows.  Higher end homes that need to be foreclosed on are more costly for the lender to takeover and maintain.   For these reasons, the interest rate on these loans are higher and lenders generally require a larger down payment for jumbo loans.  Again, the mortgage calculator has to have the proper data entered to make sure the payment calculated reflects the right loan amount.  If the mortgage calculator user is entering income and debt payment data into a mortgage affordability calculator it is important to make sure the down payment amount reflects what type of loan is available.

Jumbo mortgage loan options are very similar to traditional loan programs with the exception of the down paymet and interest rates.  Jumbo loans are available as standard 30 year and 15 year fixed rate loans as well as adjustable rate mortgages.  A standard mortgage payment calculator or adjustable rate mortgage calculator can be employed to calculate payments, debt ratios and down payment amounts.  If a borrower is looking for a jumbo loan using the mortgage calculators to compare different loan products to make an educated choice about the right loan program to fit their requirements is step that should not be overlooked.

This entry was posted on Thursday, December 11th, 2008 at 6:35 pm and is filed under Jumbo Mortgage Calculator. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.