What is jumbo ARM mortgage?
Answer:Anyone taking a residential adjustable rate home loan over the loan limits set by Fannie Mae and Freddie Mac is in fact taking what is called a jumbo ARM mortgage. The loan limits for 2008 remain the same as 2006/2007 loan limits.
| Conforming loan limits for 2008 (first mortgage loans) with the exception of Alaska, Guam, Hawaii, and the Virgin Islands | |
|---|---|
| One-family: | $417,000 |
| Two-family: | $533,850 |
| Three-family: | $645,300 |
| Four-family: | $801,950 |
Lenders have different ways of establishing what the jumbo mortgage amount is - often a loan in the range of $500,000 to $1,000,000 is called a jumbo mortgage. Residential loans of more than $1,000,000 are called super jumbo mortgage loans. Jumbos and super jumbos carry higher risk since they are not secured by Fannie Mae and Freddie Mac, and therefore carry somewhat higher rate for lenders.
A jumbo ARM mortgage is available in all flavors as conforming ARM loans. However, if a regular interest-only ARM will adjust with a cap of 2% after the fixed rate period, a jumbo ARM loan rate is more likely to adjust according to an initial adjustment cap of 5%.
| Not at all | Definitely |
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