Jumbo mortgages are often in the news as they quickly rise in popularity. From a fixed rate jumbo mortgage to one with an adjustable rate; they all over significant difference from the more traditional finance options out there.
But, what’s so good about these jumbo mortgages? Are you really better off getting a fixed rate jumbo mortgage in comparison to a regular fixed rate one? The answer ultimately depends on the home you’re looking to buy, and your current financial situation. But, there’s no denying that there are multiple benefits of jumbo mortgages as a whole.
Greater Purchasing Power
The number one benefit of this type of loan is that it grants you greater purchasing power. If you get something like a fixed rate jumbo mortgage, then you can often borrow as much money as you need to cover the full cost of a home in one go. For example, if you want to buy a $600,000 house, then you can get a 30 year fixed rate jumbo mortgage of $600,000, and it’s all covered.
Usually, mortgage loans are capped at around $430,000. So, if you wanted that home, you’d either have to pay a substantial down payment on the property of hundreds of thousands of dollars, or you’d need to take out more than one mortgage. As you can probably tell, getting the fixed rate jumbo mortgage is far easier, quicker, and less financially stressful.
Lower Interest Rates
In the past, if you looked at a fixed rate jumbo mortgage and compared it to a fixed rate government one, then the government loan would be much lower. However, times have changed, and you can get a fixed rate jumbo mortgage for the same cost - sometimes even cheaper - than a conventional one.
There are many reasons behind the decrease in fixed rate jumbo mortgage costs, but we will cover that in a separate blog post for you.
No County Restrictions
Different counties have their own mortgage restrictions in place to limit the amount of money you can borrow in one go. Another big benefit of a fixed rate jumbo mortgage is that there are no county restrictions.
Consequently, whether you live in Kansas or Arkansas, you will always be able to find a fixed rate jumbo mortgage that provides you with the money you need to buy your home.
Diversity Of Options
Last but not least, you get a diversity of loan program options with these large mortgages. As an example, we’ve spoken a lot about having a fixed rate jumbo mortgage, as this is often the most popular option. You could choose between a 30-year fixed rate jumbo mortgage or a 15-year fixed rate jumbo mortgage - both possibilities offer loans where the interest stays the same throughout the turn.
But, if you don’t like the idea of a fixed rate jumbo mortgage as you want a more adjustable rate, then you have numerous ARM jumbo’s to choose from as well.
In conclusion, both fixed rate jumbo mortgages and ARM jumbo mortgages pose many benefits. For some home buyers, this is merely the best option if you need a mortgage that exceeds the government or county limit.
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