| You may have heard of the term jumbo mortgage | | | | 1) Review current mortgage rates on the internet and |
| loan and wondered what it means. Well, in this short | | | | get a feel for the current market. Interest rates change |
| article I will take you through the meaning and why it is | | | | frequently so this step just gives you an idea. When |
| important for you to understand it. | | | | looking over rates make sure you are reviewing jumbo |
| In basic terms, if a mortgage loan exceeds a certain | | | | mortgage loan rates as there is a rate difference. |
| amount, it is considered a jumbo mortgage loan. | | | | 2) Assess your loan needs and the amount you think |
| Currently (as of 2006), a jumbo mortgage loan is a | | | | you need |
| loan more than $417,000. The limit typically changes | | | | 3) Ask family or friends for a reference of a |
| each year. In 2005, the amount was $357,650. | | | | mortgage broker |
| The great part about a jumbo mortgage loan is the | | | | 4) If you cannot find a referral, you should proceed |
| approval process is the same for conventional loans | | | | cautiously and develop a list of questions for your |
| for most lenders. Unfortunately, the interest rate for a | | | | prospective mortgage broker. |
| jumbo mortgage loan is typically 1/4% higher than a | | | | 5) Questions you should ask include: how long have |
| conventional loan but this does vary and the difference | | | | you been doing mortgage loans, are you full-time |
| seems to be less year after year. | | | | mortgage broker, how do you price your jumbo |
| Since brokers are typically compensated based on the | | | | mortgage loans, and what education do you have. |
| amount of the loan and a jumbo mortgage loan is a | | | | Asking these questions will give you a good first |
| larger amount than a conventional, you should feel | | | | impression of the mortgage broker. |
| comfortable negotiating the loan rate with your broker | | | | 6) Determine if you need to pre-qualify for a loan |
| or lender. I am amazed that people will negotiate a | | | | 7) Complete the loan application thoroughly and |
| $100 tire purchase but will fail to ask the broker | | | | accurately |
| compensation on a $1,000,000 loan. A good mortgage | | | | If you work with an experienced mortgage broker, the |
| broker is happy to discuss fees and in most cases | | | | process will be very painless as the mortgage broker |
| appreciates it. This way there are no surprises or | | | | will anticipate problems and deal with them proactively. |
| concerns after escrow closes. | | | | If you follow the steps in this article, you are well on |
| Anytime you start the loan process whether | | | | your way to getting a great jumbo mortgage loan and |
| refinancing or purchasing a home, I recommend the | | | | will build a long-term trusting relationship with a |
| following steps: | | | | mortgage broker. |