Jumbo Loans in North Carolina
Are you ready to buy your dream home? If so, you may need to borrow a significant amount of money to do so. Jumbo loans* can help you achieve that. At The Arkell Barnes Mortgage Team, we offer jumbo loans in North Carolina. With our streamlined home loan process, we make getting the right home loan faster, easier, and less stressful.
Ready to get started? See how easy it is to get a jumbo loan with Arkell!
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What Is a Jumbo Loan?
A jumbo loan, or jumbo mortgage, is a loan for an amount higher than the Federal Housing Agency’s limits. These loans are not purchased or guaranteed by Fannie Mae or Freddie Mac, the two largest lending institutions in the U.S. Often, jumbo loans are used to pay for luxury homes or those on larger lots. These loans are riskier for lenders and typically have more stringent requirements that homeowners need to meet.
Jumbo Mortgage Limits for North Carolina Home Buyers
A jumbo mortgage limit typically refers to the threshold where conforming loans end and jumbo loans begin. A conforming loan is the typical loan you’re familiar with, such as a conventional loan or an FHA loan. However, these loans may not cover high-cost properties, which is when jumbo loans become necessary.
For most of the counties in the United States, conforming loans end at $766,550, as determined by the Federal Housing Finance Agency (FHFA). Homes that exceed the local conforming loan limit require a jumbo loan. In areas with a high cost of living, the threshold for jumbo loans is higher. However, jumbo loan limits may vary in different parts of the country.
Jumbo Loan Rates in North Carolina
Jumbo loans are a higher risk for lenders. As a result, jumbo loan interest rates tend to be higher than those for conforming loans. They also have much stricter qualifications for buyers. The exact jumbo loan rate you pay is specific to your credit qualifications and other risk factors the lender considers.
Benefits & Disadvantages of a Jumbo Loan
Benefits:
- Ability to purchase and finance a home worth more.
- Essential for buying homes on the waterfront or larger estates.
Disadvantages:
- Harder to obtain, requiring a larger amount of income.
- Need to show proof of income, credit score, and have a larger down payment.
Jumbo or Conventional Loan? Which Is Better?
As you consider jumbo home loan options, compare them to traditional loans called conforming loans. The most common type of conforming loan is the conventional loan, which is often compared to jumbo loans.
Key Differences:
- Loan Size: Jumbo loans are for larger amounts.
- Interest Rates: Jumbo loan rates can be higher due to increased risk for lenders.
- Down Payments: Jumbo loans often require larger down payments. Down payments on conventional loans may range from 5% to 20%, whereas some jumbo loans require at least 20%.
Interest rates are very competitive across most lenders. If you have a good credit score and sufficient income to make payments, lenders are likely to offer a competitive rate.