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Rising real estate values power new interest in jumbo loans


Limits in Alaska, Hawaii, Guam and the U.S Virgin Islands are higher ... After the mortgage crisis, the government created a series of laws designed to make the real estate market less risky. One result is that mortgages are now divided into two groups ...


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Posted 02/26/2018 by Peter Miller Peter GMiller, author of The Common Sense Mortgage, is a real estate writer syndicated in more than 125 newspapers nationwidePeter has been featured on Oprah, the Today Show, Money Magazine, CNN and moreFollow Peter on Twitter Share This Page .resp-sharing-button__link, .resp-sharing-button__icon { display: inline-block } .resp-sharing-button__link { text-decoration: none !important; color: #fff !important; margin: 0.5em } .resp-sharing-button { border-radius: 5px; transition: 25ms ease-out; padding: 0.5em 0.75em; font-family: Helvetica Neue,Helvetica,Arial,sans-serif } .resp-sharing-button__icon svg { width: 1em; height: 1em; position: relative; bottom: -1px; margin-right: 7px; } .resp-sharing-button span { padding-left: 0.4em } /* Non solid icons get a stroke */ .resp-sharing-button__icon { stroke: #fff; fill: none } /* Solid icons get a fill */ .resp-sharing-button__icon--solid, .resp-sharing-button__icon--solidcircle { fill: #fff; stroke: none } .resp-sharing-button--twitter { background-color: #55acee } .resp-sharing-button--twitter:hover { background-color: #2795e9 } .resp-sharing-button--pinterest { background-color: #bd081c } .resp-sharing-button--pinterest:hover { background-color: #8c0615 } .resp-sharing-button--facebook { background-color: #3b5998 } .resp-sharing-button--facebook:hover { background-color: #2d4373 } .resp-sharing-button--tumblr { background-color: #35465C } .resp-sharing-button--tumblr:hover { background-color: #222d3c } .resp-sharing-button--reddit { background-color: #5f99cf } .resp-sharing-button--reddit:hover { background-color: #3a80c1 } .resp-sharing-button--google { background-color: #dd4b39 } .resp-sharing-button--google:hover { background-color: #c23321 } .resp-sharing-button--linkedin { background-color: #0077b5 } .resp-sharing-button--linkedin:hover { background-color: #046293 } .resp-sharing-button--email { background-color: #777 } .resp-sharing-button--email:hover { background-color: #5e5e5e } .resp-sharing-button--xing { background-color: #1a7576 } .resp-sharing-button--xing:hover { background-color: #114c4c } .resp-sharing-button--whatsapp { background-color: #25D366 } .resp-sharing-button--whatsapp:hover { background-color: #1da851 } .resp-sharing-button--facebook { background-color: #3b5998; border-color: #3b5998; } .resp-sharing-button--facebook:hover, .resp-sharing-button--facebook:active { background-color: #2d4373; border-color: #2d4373; } .resp-sharing-button--twitter { background-color: #55acee; border-color: #55acee; } .resp-sharing-button--twitter:hover, .resp-sharing-button--twitter:active { background-color: #2795e9; border-color: #2795e9; } .resp-sharing-button--google { background-color: #dd4b39; border-color: #dd4b39; } .resp-sharing-button--google:hover, .resp-sharing-button--google:active { background-color: #c23321; border-color: #c23321; } .resp-sharing-button--linkedin { background-color: #0077b5; border-color: #0077b5; } .resp-sharing-button--linkedin:hover, .resp-sharing-button--linkedin:active { background-color: #046293; border-color: #046293; } .resp-sharing-button--reddit { background-color: #5f99cf; border-color: #5f99cf; } .resp-sharing-button--reddit:hover, .resp-sharing-button--reddit:active { background-color: #3a80c1; border-color: #3a80c1; } Facebook Twitter Google+ LinkedIn Reddit As Seen On Rising real estate values power new interest in jumbo loans Peter Miller The Mortgage Reports Contributor More expensive homes, bigger mortgages Property values are rising in most markets, and that means jumbo loans have become more importantAs of December, home prices nationwide had increased for 70 straight months, according to the National Association of Realtors (NAR)Home prices are at new highs in nearly two-thirds of our major metro areas. 2018 conforming loan limits jump by nearly $30,000 Property prices in many areas exceed so-called "conforming" loan limits -- the maximum mortgage amount allowed by Fannie Mae and Freddie MacThe single-family limit is now $453,100 in most of the U.Sand as much as $679,650 in “high-cost” marketsLimits in Alaska, Hawaii, Guam and the U.S Virgin Islands are higher still. How do you finance a home if the value is well above the conforming loan limits? How can you get a million-dollar loan? The best solution in many cases is to use jumbo loans, larger mortgages that make financing and refinancing easy for qualified borrowers. Verify your new rate (Feb 27th, 2018) Jumbo loans After the mortgage crisis, the government created a series of laws designed to make the real estate market less riskyOne result is that mortgages are now divided into two groups, Qualified Mortgages (QMs) and Non-Qualified Mortgages (non-QMs). Most mortgages today are QMs, and this is important for jumbo borrowersLenders love to originate QM loans, including jumbo mortgagesWhy? Because a QM mortgage makes the lender virtually immune from lawsuits. How your loan size affects your mortgage rate (and what to do about it) In exchange for lawsuit protection, lenders have to follow certain rules with QMsFor example, balloon payments are not allowedPrepayment penalties are limited to 2 percent the first year, 2 percent the second year, and 1 percent in the third yearPoints and fees are limitedLoan terms cannot exceed 30 years. Qualified jumbo mortgages: they're out there Under the rules, FHA, VA, and conforming loans are automatically Qualified MortgagesHowever, a jumbo loan is too big to be insured by the FHA or VA or to be bought by Fannie Mae and Freddie MacSo how can you have a jumbo QM loan? The answer is that lenders can originate “portfolio” loans that are Qualified MortgagesA “portfolio” mortgage is a loan that will not be sold by the lenderBecause the lender originates and keeps the loan, program guidelines can be different – and more flexible – than those of FHA, VA and conforming loans. What is a portfolio mortgage? With portfolio loans, lenders can originate jumbo QM mortgages, because there is no QM loan limitThere is no minimum QM down payment requirementYou can refinance with cash outInterest rates can be fixed or adjustableIn other words, lenders and borrowers can bargain over portfolio mortgage terms, whether the loan is small or jumbo. Non-QM jumbo loans Not only can borrowers get jumbo QM loans; they can also get non-QM jumbo loansWhy would a borrower want a jumbo non-QM mortgage? Crazy mortgage programs that really exist Because jumbo lenders may offer one or more features which are not available with QM financingFor example, non-QM loans allow: Debt-to-income ratios higher than the 43 percent limit required for most QM mortgages Interest-only financing A 40-year term Millions of dollars Non-occupant co-borrowers Bank statement loan applications Alternatives for proving income Low credit scores Financing immediately after a foreclosure or bankruptcy Jumbo loans & taxes Under tax reform, the government has enacted new policies that will impact mortgage borrowersThe most important issues look like this: First, mortgage interest when you buy a home is deductible -- up to $750,000 for personal real estateThis is down from $1 million under the old rules. Is a jumbo mortgage better than a conforming loan? Second, interest on home equity lines of credit is no longer deductible, in most casesBut there is an exception if the money is used to improve the property. Third, there is a $10,000 write-off limit on itemized deductions for personal property taxes PLUS state and local taxes. As a result, property owners in high-cost, high tax areas will see higher tax bills. Speak with a CPA, tax attorney, or enrolled agent for specific tax information before financing or refinancing under the new rules. Jumbo mortgage rates The difference, or spread, between jumbo and conforming mortgage rates rises and falls, depending on marketsIn the early years of the mortgage crisis, this spread got as high as two percentCurrently, there is little difference between average jumbo and conforming rates for 30-year fixed mortgages. Source: Liberty Street Economics However, every lender is different, and that's why shopping for a mortgage is importantIn fact, it's even more important when your loan amount is large because the amounts involved are greater. Verify your new rate (Feb 27th, 2018)     Peter Miller The Mortgage Reports Contributor Peter GMiller, author of The Common Sense Mortgage, is a real estate writer syndicated in more than 125 newspapers nationwidePeter has been featured on Oprah, the Today Show, Money Magazine, CNN and moreFollow Peter on Twitter The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full BeakerThe views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates. Try the Mortgage Calculator Resources Get Today's Rates Mortgage Calculator View Loan Limits SIGN UP Stay informed on the mortgage news that interests you. Related Articles How To Use Your Mortgage "Cash-Out" Refinance View Today's Mortgage Rates Complete guide to VA home loans [current_year] How To Buy A House with No Money Down in 2018 Home refinance: When should you consider it? How Much Home Can You Afford? VA Streamline Refinance [current_year]: About the VA IRRRL mortgage program & VA mortgage rates FHA Loan With 3.5% Down vs Conventional 97 With 3% Down FHA Streamline Refinance Chart, Guidelines, Rates, & Refunds Before making a 20 percent mortgage down payment, read this Private Mortgage Insurance (PMI) Is Neither "Good" Nor "Bad" How to cancel FHA MIP or conventional PMI mortgage insurance Why You Should Shop Around When You Refinance First Time Home Buyer's Guide What is a mortgage refinance, in plain English Useful Articles VA IRRRL 203k Loan FHA Back To Work Program HARP Mortgage No Down Payment Mortgages Mortgage Insurance Premium USDA Loans FHA Streamline Mortgage Rates Today 3 Testimonials Lorraine LMedical Compliance Thank you for The Mortgage ReportsI find your reports to be both helpful and informative. Sarah MOffice Manager The Mortgage Reports has been an invaluable resource to me -- it helped me to pick the sweet spot to refinanceThanks! Ricardo PProject Manager The Mortgage Reports is awesomeThe site is extremely helpful, keeps you up-to-date, and puts you ahead of the gameAdd The Mortgage Reports to your reading list! 2018 Conforming, FHA, & VA Loan Limits Mortgage loan limits for every U.Scounty, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA) Quick Links Mortgage Rates Today FHA Refinance VA Mortgage Rates HARP Loans USDA Home Loans First-Time Home Buyers Guide The Ultimate Guide to VA Loans and VA Benefits Mortgage News in Spanish Join Our Lender Network! Who We Are About Us Contact Us We are on Facebook We are on Google+ We are on LinkedIn We are on Twitter Consumer Mortgage Tools 2017 Mortgage Loan Limits Get An Instant Rate Quote Mortgage Calculator Widget Mortgage Payment Calculator

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