Diana Metz`s Finance Blog

When looking at buying luxury homes in Phoenix, prices may seem to be beyond a buyer’s reach. With the conforming loan limit set at $417,000, any house price that is beyond that limit can be covered by Phoenix Jumbo Mortgages. This standard is set by two government-sponsored companies, Fanny Mae and Freddy Mack, who buy up the majority of mortgages from banks and other lenders. These companies will not purchase loans above the set limit, therefore many lenders will not loan more than that amount. Often luxury homes are worth a lot more than that limit, making a mortgage for a higher amount seem impossible. But, with a small group of lenders, jumbo mortgages are available to the right people.

Jumbo mortgages are bought and sold by private investors. It is worth shopping around for Phoenix jumbo mortgages, as different lenders have different high limits that they will lend up to. On average, the high limit a home buyer can expect in the Phoenix area is $2 million. But they might be able to get a larger loan by shopping around. Another advantage of looking at different jumbo mortgage lenders is that there are different interest rates available. The market for jumbo mortgages is controlled by private investors, not government-sponsored companies like Fanny Mae or Freddy Mack. Therefore the interest rates are not set but can differ between lenders. The interest rates for jumbo mortgages are anywhere from 1/4% to 1% higher than those for conforming mortgages because of the greater risk of larger loans.

When applying for jumbo mortgages, home buyers will be required to prove eligibility. A larger volume of information is needed for Phoenix jumbo loans than “conforming” loans, due to the higher risk that comes with lending that amount of money. An applicant will usually have to provide the lender with all the details of their income, assets and credit score. As jumbo loans require so much information, it is recommended that any jumbo mortgage applicant keep good records, as to not be surprised by the volume asked of them.

There are many mortgage brokers in the Phoenix area that can help and give advice to home buyers. Jumbo mortgages are best sought through an expert that knows the area well, and has experience with Phoenix jumbo mortgages and the available lenders. Luxury homes can be bought, without huge sums of money already saved, through the jumbo mortgages available through Phoenix mortgage brokers.