A jumbo loan is something quite difficult to understand for most. If you have a jumbo loan, then the odds are good that you had help in getting it, either through a broker or an agent.
They’re just really difficult to explain, and thus most people wouldn’t actually seek one out on their own. To put it simply, a jumbo loan is a loan type that exceeds the amount of a conforming loan.
Thank Fannie and Freddie for jumbling up the genre with the jumbo option. But while it might be tough to understand, you can still find some great refinancing rates if you have this type of loan.
High Risk for Lender
There’s a higher risk for the lender with a jumbo loan, and thus the initial rates are quite higher than a normal loan. This is why many are seeking to refinance. Luckily you can do that.
There are companies out there willing to purchase your loan and to give you a much lower rate over duration of 20 or more years.
Federal Government Options
One of the best options on the table is the federal government – the institution responsible for putting jumbo loans out there in the first place. By going with the FHA, you can find a great refinancing rate.
The typical rate for a 30-year refinance option is 2.75% APR, but you can also get it down to 2.3% if you qualify.
The FHA may be stingy and you may have to seek out private companies. But don’t let that deter you. You should check with the FHA first and foremost.
Last Resort Jumbo Loan Options
After government options—since you’re dealing with a government-backed loan in the first place most likely—you start to run thin on your options. However, there are still a few places offering fair jumbo loan refinance rates.
Citi Mortgage, which is just CitiBank, offers a relatively low rate of around 3% (give or take depending on situation) if you’re approved for refinancing.
Tip: When checking your options, just make sure that you always weigh the pros and cons of refinancing. You never want to get into a worse situation, so look down the road as far as you can.