When the housing market was looking especially bleak, the federal government supported jumbo loans as large as $729,750 in some regions of the country. However, that will change in October when the largest mortgage that the government will buy from lenders will drop to $625,500. Once this happens, rates on mortgages above this limit will likely rise substantially and additional documentation will likely be necessary because lenders will have to keep these loans in house. Furthermore, people looking to get these larger loans will need to have higher credit scores and will need to have downpayments of at least 20 to 30 percent.
If you think you will be in the market for these jumbo loans, you will need to act quickly because although the deadline is October, lenders will likely stop offering this sized jumbo loan by the end of this month to allow time for the mortgages to close.
The author is solely responsible for the content.