What is a Super Jumbo Option ARM?


The Super Jumbo Option ARM is a preferred mortgage type for a high class home buyers clientele. The Super Jumbo is a loan that can vary roughly somewhere from $1 million to $40 million. It is mostly of interest to high net worth clients, doctors, lawyers and business owners who have expressed affinity to luxurious homes.

Although the Super Jumbo loans can come in any mortgage type, the Super Jumbo Option ARM has gained popularity since the negative amortization turns out to be the best option for high net worth clients not pressing them to liquidate income generating assets just to acquire new property. 

Due to the traditionally low volume of super jumbos serviced a year, conventional lending institutions generally feel more comfortable issuing Fannie Mae limits conforming loans to wage-earning clients, thus failing to exploit and develop the super jumbo market niche. As a result, they do not possess the tools and experience to deal with multi-million loans on a large scale and try to fit the high net worth clients into rigid income requirements and documentation. The fact that the Super Jumbo loans are not guaranteed by the Federal government increases the risk for lenders, hence their reluctance to engage with loans of the Jumbo and especially the Super Jumbo category.

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