A residential or commercial mortgage with a loan
amount of $322,700 or greater. Apply for a Jumbo
Loans above the maximum loan amount established by Fannie Mae and Freddie Mac
are known as "jumbo" loans.
Jumbo loans exceed the amount of loans allowed by the Federal National
Mortgage Association (Fannie Mae) and the Federal Home Loan Association (Freddie
Mac), the federal agencies that oversee the secondary market in mortgage loans.
The maximum mortgage amount for Fannie Mae and Freddie Mac can go up or down and
presently stands at $322,700.
Fannie Mae and Freddie Mac are not loan
guarantors, they are purchasers from primary lenders. Fannie Mae and Freddie Mac
purchase loans from lenders and then resell the loans to other organizations
such as insurance companies and banks. On the other hand, FHA and VA are loan
guarantors. Many FHA and VA loans are purchased by Fannie Mae and Freddie Mac.
Interest rates on jumbo loans typically are slightly higher than other loans,
but this isn't always the case. Lenders who intend to keep the mortgage in their
portfolio tend to offer competitive interest rates.
Balloon loans are short-term fixed rate loans
that have fixed monthly payments based usually upon a 30-year fully amortizing
schedule and a lump sum payment at the end of its term. Usually they have terms
of 3, 5, and 7 years.