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Wait till 2009 for Jumbo Loans

If you are thinking about buying a home in the near future, just remember that 2009 is within spitting distance and there are some benefits to waiting until the turn of the year to close, including a new, higher limit on Jumbo Loans.

A lot of us wouldn’t know a jumbo loan from a jumbo jet, so now I will take the opportunity to answer a question I was recently asked –‘What is the difference between a Conforming loan and a Jumbo loan? ‘

Translated simply, it would be the loan size. Yes, size does matter. A jumbo loan amount for 2009 would be a mortgage that exceeds $417,000, while conforming loan sizes typically are under the $417,000 dollar amount.

Here are some examples of loan amounts;

If your purchase price is $521,250 and a 20 down payment, the loan amount would be $417,000 and within conforming loan limits.

But if you have a sales price of $521,250 with only 10% down payment, the loan amount would be $469,125 which will place you into the Jumbo loan category.

Both types of loans require the same documentation, income and credit requirements. In todays’ rapidly changing loan industry lenders are going back to the tried and true usage of excellent credit, income and job verification and also a larger down payment than in recent years.

When you’re deciding how much of a down payment you’re going to use keep in mind the following;

The more money you put down the less your monthly payment will be.

While rates for conforming loans are still low, jumbo rates are also still very competitive. The combination of low rates and extremely low prices is making this is a great time to buy a home.