Mar 1, 2014

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Understand More About A NJ Jumbo Mortgage

Those who are looking to buy a new home will likely have to deal with a mortgage lender at some point. Mortgage lenders are great because they provide options for buyers in need of financial assistance. One of those options is a NJ jumbo mortgage. If you’re like many first-time buyers, you have little to no idea what a jumbo mortgage is. Let’s take a look at some information you might find useful.

We all know that a mortgage is just a loan for a home, however, lenders generally have limits on how much they will lend to borrowers. For instance, a lender may not provide a mortgage for more than $650,000. Jumbo mortgages are special loans from lenders that exceed the normal limit. Borrowers may be able to receive mortgages for $1 million dollars or more, depending on the price of the home and what they can afford.

Lenders usually stick to their limits because of the risks involved with taking on a loan. Since a NJ jumbo mortgage exceeds the limits of a conventional loan, borrowers will need to pay more in order for lenders to take on the risks. This is why jumbo mortgages come with higher interests rates compared to regular loans. Since jumbo mortgages are usually given to buy very large and very expensive homes and properties, banks worry about what will happen if the borrower defaults; these types of properties can be hard to sell at full price. Ultimately, the interest rate on the jumbo mortgage will depend on the type of property in question, the mortgage amount, as well as the financial history of the buyer.

Yes, jumbo mortgages can be refinanced as well. Often homeowners may feel the need to refinance and get a new loan in order to receive lower rates on their mortgage. However, many borrowers who receive jumbo mortgage loans refrain from refinancing because of how expensive it can be. Borrowers may be forced to pay closing costs as well as mortgage tax. Talk to your mortgage lender to see what refinancing options they provide. Some lenders provide certain discounts and incentives to those who decide to refinance.

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