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Jumbo Loan |
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Jumbo loan Loans of $1 billion or more. Or, loans that exceed the statutory size limit eligible for purchase or securitization by the federal agencies. Jumbo Loan 1. A mortgage loan so large it exceeds the limits for securitization by U.S. government mortgage banks. As such, a jumbo loan cannot be guaranteed or securitized by Freddie Mac or Fannie Mae. Because of this, jumbo loans carry higher credit risk and have historically been traded at a premium to conventional mortgages. 2. A loan of $1 billion or more. Jumbo Loan What Does Jumbo Loan Mean? A mortgage with a loan amount that exceeds the conforming loan limits set by the Office of Federal Housing Enterprise Oversight (OFHEO) and therefore is not eligible to be purchased, guaranteed, or securitized by Fannie Mae or Freddie Mac. OFHEO sets the conforming loan limit size on an annual basis. Also referred to as a jumbo mortgage. Investopedia explains Jumbo Loan Jumbo loans often are securitized by institutions other than Fannie Mae and Freddie Mac. These securities carry more credit risk than do those issued by Fannie Mae or Freddie Mac and therefore trade at a yield premium that translates into slightly higher interest rates. However, in recent years the spread in interest rates between jumbo and conventional mortgages has been reduced. Related Terms: How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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Cambridge also reports that demand for multi-facility conventional jumbo loans for the acquisition or refinancing of independent living retirement apartments and assisted living facilities is on the rise. For example, if someone used a jumbo loan to buy a $470,000 home late last week, the monthly mortgage payment would be about about $155 more a month than if a traditional loan were used. This new product adds to the innovative collection of reverse mortgage offerings from SMC, including the recent addition of The Independence Plan(SM) proprietary jumbo loan. |
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