An Olympic sized swimming pool, tennis courts, and a Jacuzzi
are just a few items someone can check-off on their wish
list when shopping for the over $359,650 home loan. The
type of property worthy of a JUMBO mortgage can represent
a home with all the consumer amenities of which one can
Since Freddie Mac and Fannie Mae are extending their lending
offerings with new and improved JUMBO Mortgages, conventional
loan holders will automatically receive an upgrade in their
The new law took effect January 1, of 2005. JUMBO mortgages,
true to their name in the way they offer a mega loan with
a heavy interest rate, allow borrowers to extend the dollar
value of the original amount loaned.
Therefore, the question remains, are normal | conventional
loans worth more than they used to be? For the home owner
straddling the fence trying to get a larger conventional
loan, this new mortgage upgrade may prove very helpful.
Based on current housing prices, Federal regulators authorize
an annual or 12 month rate (based on housing prices). As
result Fannie Mae (FNM) and Freddie Mac (FRE) were permitted
to adjust their loan purchase caps. The advantage of the
rate adjustment will make it possible for lenders to lower
borrowing costs for buyers of more expensive homes.
The irony behind the increase was fueled by the recent
record number of home sales which came about as a result
of the unbelievably four year low interest rate period that
lasted from 2000 to 2004. Low interest rates in combination
with sizable appreciation in properties helped in enormous
measures to leverage the realty and mortgage industries.