FHCE 2100 Lecture Notes - Lecture 28: Jumbo Mortgage, Freddie Mac, Conforming Loan

• School: University of Georgia
• Department: Financial Planning, Housing and Consumer Economics
• Course: FHCE 2100
• Professor: Dr.Kabaci

Document Summary

A home loan with a loan amount up to ,000 that also fits underwriting guidelines set forth by fannie mae and freddie mac. Guidelines include credit, income, & assets requirements. Government-backed pair that buy and securitize mortgages on the secondary market. Mortgage rates are generally lowest for loans at or below the ,000 loan limit. A mortgage loan in an amount above conventional conforming loan limits. Maximum amount for jumbo loan = ,500. A higher risk for lenders, mainly due to their larger size rather than credit quality. Lenders prefer to have a higher down payment from jumbo loan seekers. If a jumbo mortgage loan defaults, it may be harder to sell a luxury residence quickly for full price. Interest rate charged on jumbo mortgage loans generally higher than conforming loans. More expensive to refinance a jumbo loan due to the closing costs. Not backed by fannie mae or freddie mac.