Mortgage loans are categorized in a variety of fashions but one of the most common characterizations is whether the loan amount is conforming or jumbo. For Florida home mortgages the conforming loan limit is currently $453,100. Anything above that amount is considered a jumbo loan amount. What are the differences between a conforming and jumbo loan? Essentially, there are few differences. Jumbo loans will have slightly higher rates compared to conforming ones but other than the loan limit are approved in much the same fashion as a conforming one.
Jumbo mortgage financing options in Florida include both fixed rate terms and adjustable rate loans. Fixed rates for jumbo loans can range from 10 to 30 years. The longer the loan term the lower the monthly payment but there is more interest paid over the life of the loan the longer the term. Shorter terms require less interest but the monthly payments will be higher. Adjustable rate jumbo loans in Florida are more commonly offered as a hybrid. A hybrid mortgage is an adjustable rate loan that is fixed for a predetermined period of time before changing into a loan that can adjust once per year. The benefit of a hybrid compared to a fixed is the hybrid will have a slightly lower rate compared to a fixed rate loan.
The minimum down payment for most jumbo programs is 20 percent but borrowers can get a slightly lower rate by putting 25 percent down. Lower down payment jumbo loans can also be used by financing the purchase with a first and a second mortgage, keeping the first mortgage at 80 percent of the value of the property. Jumbo loans in Florida can be used to both purchase as well as refinance an existing loan and can be used to finance a primary residence, vacation home or investment property.