Jumbo ARM Mortgage Loans
Interest rates for jumbo ARM mortgages (adjustable rate mortgages) in Illinois, Indiana, Michigan, Minnesota and Indiana are basically at all-time lows. In this 5 state area, a jumbo mortgage loan is any amount which exceeds $417,000 for a one unit home to include a single family detached, townhome or condo. For many of these “jumbo ARMs”, the interest rate is actually lower than a conventional ARM.
According to Mike Dulla, President of United Home Loans, this is an extremely rare occurrence. “I have been in the business for over 20 years and have never seen jumbo mortgages rates priced lower than conforming mortgage rates. This is clearly an indication that banks and other financial institutions see jumbo mortgage borrowers as a very low risk investment”.
Jumbo mortgage loans with the lowest interest rates will still require a down payment of 20% or more for a new home purchase, but some lenders are starting to offer relatively low down payment jumbo mortgage options. “Some of our partner lending institutions offer jumbo loans to new home buyers with only 10% down. For this program, a borrower will need a 740 credit score and the maximum mortgage amount is $750,000”, Dulla adds. “This is a great option for someone with solid annual earnings who sold their previous home at a discount and has yet to accumulate sizeable liquid assets for another down payment.”
Adjustable rate mortgages are not for every borrower. It is very important to understand the risks along with the benefits. For additional information, please reach out to one of our loan officers today.