Understanding the Jumbo Loan Limits for 2010

If you are a potential home owner and are looking for a home mortgage, then it is very important to understand what the jumbo loan limits 2010 are, and how they will potentially impact your mortgage rates and ultimately the cost of the mortgage loan.

First, you need to understand and know what the current jumbo conforming loan limits are for your specific area. These limits are limits set by the government agencies such as the FHS (Federal Housing Finance Agency) and Fannie Mae and Freddie Mac (I classify the two latter companies as government agencies as they essentially are owned 100% by the federal government currently) in which these agencies will make loans or back loans. The general amount that would be considered a conforming loan (as in conforming to the agencies limitations) is currently $417,000 for the first unit home. If you home falls outside of this limit, then your mortage will most likely be classified as a Jumbo loan, and you may have to pay a slightly higher interest rate and put a little bit more money down to get into your home.

However, even if your mortgage is going to be over the current limit of $417,000 that doesn’t mean you are left with no options. First of all, you need to check one of the agencies websites (or as your mortgage broker) to find out if you home is located in what is called a ‘high cost’ area. If it is, then the limit on your mortgage may be as high as $729,750 – making it much easier and reasonable for home buyers in high cost areas such as Los Angeles, Las Vegas, Miami, or New York.

The bottom line is that you need to know what these jumbo mortgage limits are, as they do have the potential to change each and every year (although in practice the amounts do not generally change every year) – they can have a very material effect on the ultimate cost of your mortgage.

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