Question:

What do rates on super jumbo mortgage loans depend on?

Answer:

Lenders generally have different ideas on the limits of jumbo and super jumbo mortgage loans, and rates for the two will vary, as well. Interest rates on super jumbos will be higher than jumbo rates.

Factors for Jumbo and Super Jumbo Mortgage Loan Rates

High liquidity, Loan-to-Value (LTV), loan amount, and fixed or adjustable rate are important to non-conforming loans terms and rates. In general, the higher the loan amount the higher the rate. It is not unusual a $1 million loan with 65% LTV to have 0.25% lower rate than a $2 million super jumbo with 60% LTV.

Unlike residential conforming mortgages, 100% financing for a super jumbo may be impossible to get. LTV usually is 60 to 70%, and for loans over $2.5 million high asset liquidity (some 80 per cent) may be required.

Hybrid ARMs and balloons are popular among super jumbos and those could carry 1 point lower rate than the fixed rate alternative. A large number of super jumbos are construction loans and for many of those the 5/1 Hybrid ARM Super Jumbo is a perfect match.

Jumbo and Super Jumbo Loan Amounts

Some lenders will consider a jumbo any loan exceeding the 2007 conforming loan limit for single-unit properties, which is $417,000, and a super jumbo - any exceeding $650,000. Sometimes, a Jumbo is considered to be a loan within the $729,750 - $1.5 million range; and a Super Jumbo would be some $2 million loan.

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