Arizona Jumbo Loans

Arizona Jumbo Mortgage Loans

Jumbo loans in Arizona are any loan that is over $417,000 because $417,000 is the “conforming” loan limit. “Conforming” means that the loan can be bought by Fannie Mae or Freddie Mac and congress has not authorized Fannie / Freddie to buy any mortgage that is over $417,000.

Because jumbo loans cannot be bought by these entities, Arizona jumbo loans are offered by lenders and are bought by private investors. There are many different investors that buy jumbo loans, and lenders that have relationships with these investors offer jumbo loans to the consumer.

Generally speaking, in order to qualify for a jumbo loan, you must have good credit and be able to document your income and assets. You should also expect to have a significant down payment.

Generally speaking, lenders will have a “high-limit” that jumbo mortgages can go to – but you will generally find that it will vary from lender to lender.  If you call 5 different lenders, you will generally hear 5 different maximum loan amounts. Generally speaking, we have found that the average maximum loan amount is about $2,000,000.

Interest Rates For Jumbo Loans

Because Arizona jumbo mortgage loans are often times a “portfolio product” — meaning the lender who originates the loan will actually hold the loan and service it as well, interest rates on jumbo loans are generally about 1/4% – 1% higher than those loans on conforming-under-$417,000 loan amounts. In other words, if a Fannie Mae conforming, 30-year fixed rate is at 6%, you can expect your jumbo mortgage rate to be at 6.25% or 7%.

There is not a “daily interest rate” that jumbo loans have – they are set by the market and move minute by minute based on buyers and sellers. Even though there is a market interest rate, sometimes one particular investor will make a decision that they want to increase their jumbo loan portfolio, they may lower rates so that they are the same as a Fannie Mae loan.  On that same day, another lender may want to reduce the number of jumbo loans in their portfolio and will raise rates accordingly.

 

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