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Jumbo Mortgage

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 dream.

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 loan amount.

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.