Jumbo Loans Continue to Dominate
A mortgage loan with a high balance, generally exceeding $417,000, is considered a jumbo loan. These loans are dominating the market right now and here’s why.
A jumbo loan can be different in each housing market and is generally reflective of home prices. In higher-priced markets, for example, the jumbo loan amount starts at a higher limit since jumbo loans generally mean higher interest rates. In order to maintain consistency, higher-priced areas need a loan limit that is appropriately reflective of the area.
Why are jumbo loans so popular now? Mainly, it is because of the prices of homes nationwide. The market has fluctuated drastically since the crash in the late 2000s. And we are currently seeing home prices much higher than we have in many years as the market bounces back in an attempt to steady itself. So when borrowers apply for a loan and find a home they want to purchase, often times the price of the home is higher than they have been in the past and requires a jumbo loan to complete the transaction. With this in mind, we have seen a jump in jumbo loans this year and they continue to dominate much of the industry.
Learn more about jumbo loans and if it is the right fit for you and your financial situation by talking to your trusted mortgage professional today.