Jumbo Mortgage Loans on the Rise

Many companies are posting large year over year increases with jumbo mortgage loans. During the past couple of years, many banks and mortgage companies tightened up their guide lines for jumbo mortgage applicants making it more difficult for borrowers to obtain financing for more expensive homes.

Jumbo loans generally consist of loans greater than $417,000. However, in some high cost areas, jumbo loans can exceed $729,750. Because these loans tend to be larger loan amounts than conventional and FHA loans lenders and government entities typically find them to be more risky. During the real estate crisis many banks tried to mitigate their risk by using more stringent guide lines and cutting back on lending for jumbo loans.

However, in recent months, a increase in jumbo loan fundings maybe a key indicator on market conditions. Some major banks have reported large increases with their jumbo loan lending such as a major bank stating that they have a 146% increase over the past 6 months of this year versus the same time period last year.

Even though jumbo mortgages have increased this year, guidelines still tend to be tighter than before. High loan borrowers maybe attracted to the record low jumbo interest rates that are available helping fuel these increases. Whatever the reason for these increases, jumbo mortgage borrowers should consult their mortgage professional to see if refinancing is a beneficial for their specific situation.