At Acceptance Capital we want to make sure that Americans living in the great state of New Mexico have easy access to home ownership. We specialize in understanding a potential borrower’s needs and knowing the right options for the right client. For those looking to finance a home with a higher than average value, a jumbo loan is a great option.
A loan is considered a jumbo loan when it exceeds the conventional loan limits set by government sponsored lending enterprises such as Fannie Mae and Freddie Mac. Those looking to finance a home with a jumbo loan should expect higher interest rates than a typical conforming loan.
In an effort to help economic recovery, President George W. Bush signed the Housing Economic Recovery Act of 2008 into law which temporarily increased the loan limits for jumbo loans to $729,750 or 125% of the median home value in a given area depending on which is lower.
These higher limits were originally meant to expire after 2008 but were extended through 2010. Increasing loan limits was meant to lower interest rates, but it was not as successful as expected. The jumbo loan limits were lowered back to normal in 2011.
Interest rates for jumbo loans are based on a variety of factors, the most important of which is the risk to the lender. Jumbo loans typically require higher interest rates due to higher risk.
The risk is higher because if a jumbo loan defaults, it is more difficult to sell a higher valued property quickly for its full value. Also properties with higher values are more vulnerable to market value fluctuations. For these reasons, lenders typically require borrowers to pay a higher down payment.
Borrowers looking to finance a home through a jumbo loan will normally be required to meet higher requirements on parameters such as debt-to-income ratio, value of all assets, and FICO credit score.
Here at Acceptance Capital, we specialize in providing potential borrowers the knowledge needed to make the right decision when financing a home. Although we are located in Santa Fe, we dedicate ourselves to providing some of the most competitive jumbo loan rates throughout the entire state of New Mexico.
Please contact us for a quick and easy quote to make your dream of homeownership a reality!