What is a Jumbo Mortgage Loans? How They Work in the Current Economic Climate.

The world of finance and fluctuating mortgages rates is a confusing world for most potential new home buyers and it can be extremely difficult to navigate without doing some research and understanding exactly what your getting into.

The recent home mortgage crisis has affected almost everyone in the Nation and has impacted all forms of mortgages loans. A jumbo mortgage loan is a mortgage loan for an amount above the conventional conforming loan. A conventional conforming loan is in the neighborhood of $417,000 or less and is certainly where most Americans are at in purchasing power.

A jumbo mortgage loan is for an amount between $417,000 and $729,750. Any amount over that would be considered a super jumbo loan.

One of the unexpected side benefits of the mortgage fallout was the unintentional creation of a new mortgage loan level that fell somewhere on the middle ground. The new jumbo conforming level is expected to go away at the end of 2010 as the mortgage crisis levels out and the playing field is leveling.

Most Freddie Mac and Fannie Mae mortgage loans which are now under government conservatorship or backed by the FHA are 0.25% to 0.5% points cheaper than those without the government backing. With less private lenders in the market, getting qualified for a jumbo mortgage loan is more difficult than it was before the mortgage crisis. However one change that has resulted in the mortgage crisis that has helped consumers qualify for the jumbo loan mortgages has been the stimulus package. The stimulus package made the jumbo loan refinancing loans a more viable option than in the past because it raised the limit for conforming plan mortgages to $615,000 which moved many jumbo loans into the conventional loans limit; this made the ability to refinance jumbo loans easier.

Currently the 30 year jumbo mortgage rate is averaging 5.45% which is down slightly from earlier rates of 5.49%. The 15 year rates are up from earlier rates and are holding at 4.92%. The interest rates fluctuate based on a variety of factors the simplest of course is supply and demand for housing. Another factor influencing the mortgage loan rates has been the fluctuating Treasury bond rates. Interest rates are expected to rise again but right now the rate has remained steady making these loans more appealing to the consumer.