Jumbo mortgages are any mortgage loan over the conforming loan limit set by the Federal Housing Finance Agency (FHFA). Currently, that limit is set at $417,000 in the contiguous United States. So, if you’re borrowing more than that to finance a house, you’re looking for a jumbo mortgage.

In a lot of Florida markets, $417,000 won’t get you very far. According to the Coldwell Banker Home Listing Report, the average home price in Palmetto Bay is $499,559, with Weston following at $462,636, Fort Lauderdale at $453,155, and Davie at $437,092.

Fortunately, jumbo mortgages are widely available, but they are generally more expensive than conforming loans. That’s because conforming loans are often backed by government agencies like Fannie Mae, Freddie Mac, the Office of Veteran’s Affairs (VA), or the Federal Housing Authority (FHA). Mortgage loans backed by the government are less risky, so lenders charge lower interest rates.

Tips to Reduce Your Rates

If you’re in the market for a jumbo loan, what can you do to make sure you get the best rates? Here are some ideas:

  • Make a Bigger Down Payment. The best way to lower the risk to your lender is to put as much cash down as you can. A 20 percent (or more) down payment can significantly lower your rates.
  • Submit a Squeaky-Clean Mortgage Application. Scrutinize your mortgage application carefully, and make sure it’s accurate. Get your credit report and check it carefully. The better your credit is, the better your interest rates will be.
  • Use a Licensed Mortgage Broker. A broker can help you find the best possible deals for your mortgage, and increase your options.
  • Shop Around. Jumbo mortgages are private-market lending, and every lender will have different terms and rates. With the help of your broker, compare as many loan options as you can.
  • Compare Closing Costs. Some lenders may offer lower rates but will try to make it up by charging higher closing costs and fees. Compare fees and costs just as carefully as you compare interest rates.

Get Our Perspective

At Embrace Home Loans, we can help you shop around for a jumbo mortgage that meets your needs while keeping your interest rate down. We’re experts in the Florida real estate market, and we’ll work with you to find the financing you need. Call us at 407-733-6425, or browse the rest of our website for more information.