Fannie Mae and Freddie Mac are large agencies that purchase the bulk of U.S. residential mortgages from financial institutions to allow them to free up cash to make more loans. They have limits on the maximum value of any individual loan they will purchase from a lender. A loan that meets their standards is known as a conventional conforming loan. Currently in King, Pierce, and Snohomish Counties, this limit is set at $667,000 for 1 unit properties. With the current home prices in the Puget Sound area, it is not uncommon for a borrower to need a loan greater than these amounts. Ifthis is the case, your loan would be considered a jumbo loan.
Q. Is it more expensive?
A. As the risk to the lender is greater on jumbo loans, the interest rates and fees are typically higher than on conforming loans so it is important for you to shop around. Make sure that in addition to the interest rate, you consider all of the estimated costs.
Every loan is different, so call me about your individual situation.
Ray Batalona, BECU Mortgage Advisor, 425-609-5481. Equal Housing Opportunity Lender. NMLS #116652