To be clear, a jumbo mortgage is one that is above $417,000, but that does not mean the home being purchased is that amount. We’re talking about the amount of the loan. So, for instance, if you purchased a home in Atlanta for $500,000 and put down 20 percent ($100,000), your $400,000 loan would not be a jumbo.
Also, the titleholder on a jumbo may not necessarily be an individual; for instance, the titleholder might be some kind of corporate entity. Still, the borrower is always a person, as mortgages are made to individuals, not entities.
The exception to the jumbo threshold is in some areas of the country where housing costs are designated “high cost” by Fannie and Freddie. These include areas you might expect like Greenwich, Connecticut, parts of South Florida and Hawaii, but also about 100 other places. The jumbo limit in high-cost areas falls between the aforementioned floor of $417,000 and may not kick in until $625,000. The only Georgia market considered high cost is the Lake Oconee area in Greene County; otherwise, a jumbo loan here is anything above $417,000.
In addition to primary residences, jumbo mortgages may also be used for second homes and investment properties. And, as with conforming or non-jumbo loans, jumbos may be fixed-rate or adjustable-rate, though the latter is more the norm in the jumbo world. Again, the availability, application and terms of a jumbo mortgage will vary depending on your lender, as well as on your own circumstances. Your mortgage pro can help you understand specific terms and requirements.
And that’s a crucial point: It pays to align yourself with a compatible mortgage banker. One who suits your style and needs and with whom you will be comfortable working during the process. Most likely one on whom you have direct credible references – from a friend, neighbor or a trusted professional like your Realtor. Jumbo or not, your goal should be to work with someone who will get you to the closing table with the fewest surprises or problems.