Blacksburg Mortgage Broker Shares 5 Jumbo Loan Myths You Thought Were True
The phrase “jumbo loan” can be intimidating to a lot of homebuyers who have no prior experience with them.
But jumbo mortgages do not have to be intimidating. In fact, many of the daunting beliefs which homebuyers have about jumbo loans are myths.
Could a jumbo loan be more affordable than you think? What else might you be surprised to learn about jumbo loans? Let’s go over some widely held beliefs about jumbo mortgages which simply are not true.
5 Jumbo Mortgage Myths That are Not True
- Mortgage rates are always higher with jumbo loans.
Perhaps the most common myth about jumbo mortgages is that their interest rates are always considerably higher than those for conforming loans.
But in truth, on average, jumbo mortgage interest rates only marginally exceed those of conforming mortgages.
And in terms of specific situations, oftentimes, jumbo mortgages will be no more expensive where interest is concerned than conventional home loans.
In some situations, you could even pay less interest on a jumbo loan than another homeowner might on a conventional loan.
- You don’t need a jumbo loan if you are not shopping for a million-dollar property.
There is a common belief that jumbo loans are only necessary if you’re spending a minimum of $1 million on a home.
This number is completely incorrect and seems to be entirely arbitrary. You need a jumbo loan anytime you borrow more than is permissible within the Fannie Mae and Freddie Mac conforming loan limits.
Here are the conforming loan limits which apply to most counties:
- 1 unit: $510,400
- 2 units: $653,550
- 3 units: $789,950
- 4 units: $981,700
If you are shopping for a home in Blacksburg, Virginia, those are the loan limits that apply.
In higher-cost areas of Virginia, the conforming loan limits are higher. For example, in Fairfax County, these are the conforming loan limits:
- 1 unit: $765,600
- 2 units: $980,325
- 3 units: $1,184,925
- 4 units: $1,472,550
Now that you are aware of these limits, you probably can picture homes that you are familiar with off the top of your head which would require jumbo mortgages to purchase despite being modest (see below).
- Average size homes never require jumbo loans.
Just as there are many homebuyers who assume that you only need a jumbo mortgage if you are buying a home that requires you to borrow $1 million or more, many also believe that you only need a jumbo mortgage if you are purchasing a mention.
But you do not need to be purchasing a huge home or even a very large one to need a jumbo loan in some locations. That is especially true in Virginia, being as there are so many high-cost areas here.
Even with higher conforming loan limits in those locations, there are still plenty of average homes that require jumbo financing.
- You need a massive down payment for a jumbo loan.
A widespread assumption about jumbo loans is that you need to be ready to put at least 30% down when you buy a home.
But that is no longer the case. Jumbo mortgages are much more flexible today than they used to be. If you have a healthy risk profile, you might be able to purchase a home with a jumbo loan in Virginia with just 10% down.
- It is hard to find jumbo loans.
One more myth about jumbo mortgages is that there are not a lot of mortgage companies that offer them.
Jumbo loans did become more difficult to come by during the recession years, but that was a long time ago now. Today, there are many opportunities to buy homes with jumbo mortgages in Virginia.
Apply for a Competitive Jumbo Loan in VA Now
First Residential Mortgage in Blacksburg VA helps homebuyers in Blacksburg, Marion, Abingdon and throughout the state of Virginia to purchase beautiful homes outside the conforming loan limits.
They can work with you to help you purchase a home with a down payment you can afford and competitive interest on a jumbo loan. To get started now, call them today at (540) 838-5868 to schedule your consultation with First Residential Mortgage.