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What is A Jumbo Mortgage?

Fannie Mae & Freddie Mac are government-sponsored enterprises which provide liquidity to the national mortgage market by buying mortgages and keeping them in their portfolios or packaging the residential mortgages into mortgage-backed securities (MBS) sold to secondary investors. They have limits on the size of the residential mortgages they package into securities. Jumbo mortgages are loans which back home purchases where the amount financed exceeds the conforming mortgage loan limit.

Jumbo does not refer to the size of the house, but rather the amount of the loan. Many coastal properties are highly valued even if they are not physically large dwellings.

the distinction between jumbo and super jumbo is also based upon the amount of the loan. Lenders internally determine where they set classifications. In many parts of the country $1,000,000 is the demarcation line, but in wealthy areas the floor for super jumbo might be closer to $1,500,000 or $2,000,000.

Jumbo Rates vs Conforming Mortgage Rates

Jumbo mortgages have higher risk to the lender and lower liquidity in the marketplace. Historically lenders have typically charged higher rates than on conforming mortgages, though as the recovery has continued that gap has shrunk and there have been brief periods where yields on jumbo mortgages were lower than conforming mortgages. Prior to the 2008 recession jumbo loans had a spread of about 0.2% against conforming loans. During the crisis this spread blew out to a peak of about 1.7%, but has since come down to where jumbo mortgages are similarly priced to conforming mortgages.

Jumbo loans can be structured as either fixed or adjustable rate offerings, and yields tend to be similar to the associated conforming options. The most common adjustable rate option is the 5/1 ARM but other options exist including 5/5, 7/1 & 10/1.

For the first two loan types it means the interest rate would remain the same for the first 5 years of the loan. Then on the first loan the interest rate could reset annually after that, whereas on the second loan interest rates would reset every 5 years. The third and fourth examples would have a set rate for 7 and 10 years respectively and then reset annually. Adjustable-rate mortgages adjust based upon a spread off a reference rate such as LIBOR, up to a pre-determined rate cap in the loan contract.

Borrower Qualification

Lenders create their one underwriting guidelines for jumbo loans. As part of that process, borrowers may have to produce bank statements over the past year along with W2s, and 1099s. Self-employed people may need to show two years of tax returns. Lenders also typically want to see

  • the borrower has a 6 to 12 month cushion in savigs to cover note payments,
  • a FICO credit score of at least 680 to 700, and
  • a debt-to-income ratio below 40% to 45%

A second appraisal of the home may also be required to verify its value.

The additional information needed to qualify a borrower means that closing costs are typicially higher on jumbo mortgages than on conforming loans.

Down Payments

On conforming mortgages about 35% of borrowers put at least 20% down. On jumbo mortgages down payments of 5% or 10% are quite common.

PMI

Most jumbo loans do not require PMI payments, however borrowers with a small downpayment may incur additional fees and get charged a higher interest rate. The higher rate of interest is a way lenders can self-insure the loan, charging the equivalent of PMI for those with small down payments. Those who are buying a second home with a jumbo loan will typically be required to show more reserves and have better credit.

Second Mortgage Option

Some borrowers who struggle to secure a jumbo loan may be able to qualify for a conforming loan and use a second piggyback mortgage plus put more cash down to get below the conforming loan limits, which are $424,100 for a single-family home throughout most of the country and $636,150 in designated high-cost areas. Piggyback loans are typically issued for 10% to 15% of the property purchase price and come with a slightly higher rate of interest since the primary mortgage has the first claim on any default. In most cases second mortgages use adjustable rates, but fixed rate options are available at slightly higher rates.

Homeowner's Insurance

Homes backed by jumbo loans should be fully insured to protect against natural disasters. Most insurance policies do not cover earthquakes or flooding by default, so supplemental policies may be needed.

Income Taxes

In 2017 homeowners are able to deduct from their income interest expenses on up to $1 million dollars of mortgage debt. At a 4.25% interest rate, a homeowner would pay $42,174.13 in interest during the first 12 months. That compares against the following standard deduction amounts.

2017 Filing Status Standard Deduction Amount
Single $6,350
Married Filing Jointly & Surviving Spouse $12,700
Married Filing Separately $6,350
Head of Household $9,350
Additional Dependents $1,050

If a married couple had 2 kids an income of $650,000 and were taxed at the marginal 39.6% rate then claiming the mortgage interest deduction on the above mortgage could save them about $10,840.15 in federal income tax.

($42,174.13 - $14,800) * 39.6% = $10,840.15.

In 2013 the "Pease limitation" was re-enacted. It along with the "Personal Exemption Phaseout" act as a surcharge on high-income individuals which act as a ~ 1% surcharge on income.

It is also worth noting that a rising rate curve would lift the interest expense on debt & that pending tax reforms may impact how mortgage interest is counted against income.

Conforming Mortgage Limits

As of 2017 Congress set the conforming loan limit for single unit homes across the continental United States to $424,100, with a ceiling of 150% that amount in areas where median home values are higher. The limit is as follows for 2, 3, and 4-unit homes $543,000, $656,350, and $815,650. The limits are higher in Alaska, Hawaii, Guam & the U.S. Virgin Islands.

Homes NOT in Designated High-cost Areas

The limits in the first row apply to all areas of Alabama, Arizona, Arkansas, Delaware, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, South Dakota, Texas, Vermont, Wisconsin & most other parts of the continental United States.

The limits in the second row apply to all parts of Alaska, Guam, Virgin Islands, Washington D.C & some parts of Hawaii.

Units 1 2 3 4
Continental U.S. $424,100 $543,000 $656,350 $815,650
Alaska, Hawaii, Guam & U.S. Virgin Islands $636,150 $814,500 $984,525  $1,223,475

Homes in Designated High-cost Areas

The areas covered in this table are further detailed below the map in state-by-state tables.

Units 1 2 3 4
Continental U.S. $636,150 $814,500 $984,525  $1,223,475
Alaska, Hawaii, Guam & U.S. Virgin Islands $954,225 $1,221,750 $1,476,775 $1,835,200

The FHFA offers an interactive map of conforming limits by county. A static version of the map is included below.

Nationwide Map of Conforming Loan Limits.

Here is state by state data for areas where the limit excedes the baseline loan limit range. For all other areas of the country the above listed limits apply.

California

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Alameda 06001 San Francisco-Oakland-Hayward, Ca $636,150 $814,500 $984,525 $1,223,475
Alpine 06003 Non-Metro $463,450 $593,300 $717,150 $891,250
Contra Costa 06013 San Francisco-Oakland-Hayward, Ca $636,150 $814,500 $984,525 $1,223,475
El Dorado 06017 Sacramento--Roseville--Arden-Arcade, Ca $488,750 $625,700 $756,300 $939,900
Los Angeles 06037 Los Angeles-Long Beach-Anaheim, Ca $636,150 $814,500 $984,525 $1,223,475
Marin 06041 San Francisco-Oakland-Hayward, Ca $636,150 $814,500 $984,525 $1,223,475
Mono 06051 Non-Metro $529,000 $677,200 $818,600 $1,017,300
Monterey 06053 Salinas, Ca $575,000 $736,100 $889,800 $1,105,800
Napa 06055 Napa, Ca $636,150 $814,500 $984,525 $1,223,475
Nevada 06057 Truckee-Grass Valley, Ca $477,250 $610,950 $738,500 $917,800
Orange 06059 Los Angeles-Long Beach-Anaheim, Ca $636,150 $814,500 $984,525 $1,223,475
Placer 06061 Sacramento--Roseville--Arden-Arcade, Ca $488,750 $625,700 $756,300 $939,900
Sacramento 06067 Sacramento--Roseville--Arden-Arcade, Ca $488,750 $625,700 $756,300 $939,900
San Benito 06069 San Jose-Sunnyvale-Santa Clara, Ca $636,150 $814,500 $984,525 $1,223,475
San Diego 06073 San Diego-Carlsbad, Ca $612,950 $784,700 $948,500 $1,178,750
San Francisco 06075 San Francisco-Oakland-Hayward, Ca $636,150 $814,500 $984,525 $1,223,475
San Luis Obispo 06079 San Luis Obispo-Paso Robles-Arroyo Gran $586,500 $750,800 $907,550 $1,127,900
San Mateo 06081 San Francisco-Oakland-Hayward, Ca $636,150 $814,500 $984,525 $1,223,475
Santa Barbara 06083 Santa Maria-Santa Barbara, Ca $625,500 $800,775 $967,950 $1,202,925
Santa Clara 06085 San Jose-Sunnyvale-Santa Clara, Ca $636,150 $814,500 $984,525 $1,223,475
Santa Cruz 06087 Santa Cruz-Watsonville, Ca $636,150 $814,500 $984,525 $1,223,475
Solano 06095 Vallejo-Fairfield, Ca $431,250 $552,050 $667,350 $829,350
Sonoma 06097 Santa Rosa, Ca $595,700 $762,600 $921,800 $1,145,600
Ventura 06111 Oxnard-Thousand Oaks-Ventura, Ca $636,150 $814,500 $984,525 $1,223,475
Yolo 06113 Sacramento--Roseville--Arden-Arcade, Ca $488,750 $625,700 $756,300 $939,900

 

Colorado

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Adams 08001 Denver-Aurora-Lakewood, Co $493,350 $631,550 $763,450 $948,750
Arapahoe 08005 Denver-Aurora-Lakewood, Co $493,350 $631,550 $763,450 $948,750
Boulder 08013 Boulder, Co $529,000 $677,200 $818,600 $1,017,300
Broomfield 08014 Denver-Aurora-Lakewood, Co $493,350 $631,550 $763,450 $948,750
Clear Creek 08019 Denver-Aurora-Lakewood, Co $493,350 $631,550 $763,450 $948,750
Denver 08031 Denver-Aurora-Lakewood, Co $493,350 $631,550 $763,450 $948,750
Douglas 08035 Denver-Aurora-Lakewood, Co $493,350 $631,550 $763,450 $948,750
Eagle 08037 Edwards, Co $636,150 $814,500 $984,525 $1,223,475
Elbert 08039 Denver-Aurora-Lakewood, Co $493,350 $631,550 $763,450 $948,750
Garfield 08045 Glenwood Springs, Co $636,150 $814,500 $984,525 $1,223,475
Gilpin 08047 Denver-Aurora-Lakewood, Co $493,350 $631,550 $763,450 $948,750
Hinsdale 08053 Non-Metro $427,800 $547,650 $662,000 $822,700
Jefferson 08059 Denver-Aurora-Lakewood, Co $493,350 $631,550 $763,450 $948,750
Lake 08065 Non-Metro $625,500 $800,775 $967,950 $1,202,925
Ouray 08091 Non-Metro $425,500 $544,700 $658,450 $818,250
Park 08093 Denver-Aurora-Lakewood, Co $493,350 $631,550 $763,450 $948,750
Pitkin 08097 Glenwood Springs, Co $636,150 $814,500 $984,525 $1,223,475
Routt 08107 Steamboat Springs, Co $625,500 $800,775 $967,950 $1,202,925
San Miguel 08113 Non-Metro $625,500 $800,775 $967,950 $1,202,925
Summit 08117 Breckenridge, Co $625,500 $800,775 $967,950 $1,202,925

 

Connecticut

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Fairfield 09001 Bridgeport-Stamford-Norwalk, Ct $601,450 $769,950 $930,700 $1,156,650

 

Florida

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Collier 12021 Naples-Immokalee-Marco Island, Fl $450,800 $577,100 $697,600 $866,950
Monroe 12087 Key West, Fl $529,000 $677,200 $818,600 $1,017,300

 

Georgia

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Greene 13133 Non-Metro $515,200 $659,550 $797,250 $990,800

 

Hawaii

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Hawaii 15001 Hilo, Hi $636,150 $814,500 $984,525 $1,223,475
Honolulu 15003 Urban Honolulu, Hi $721,050 $923,050 $1,115,800 $1,386,650
Kalawao 15005 Kahului-Wailuku-Lahaina, Hi $657,800 $842,100 $1,017,900 $1,265,000
Kauai 15007 Kapaa, Hi $713,000 $912,750 $1,103,350 $1,371,150
Maui 15009 Kahului-Wailuku-Lahaina, Hi $657,800 $842,100 $1,017,900 $1,265,000

 

Idaho

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Teton 16081 Jackson, Wy-Id $636,150 $814,500 $984,525 $1,223,475
Blaine 16013 Hailey, Id $625,500 $800,775 $967,950 $1,202,925
Camas 16025 Hailey, Id $625,500 $800,775 $967,950 $1,202,925
Lincoln 16063 Hailey, Id $625,500 $800,775 $967,950 $1,202,925

 

Maryland

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Anne Arundel 24003 Baltimore-Columbia-Towson, Md $517,500 $662,500 $800,800 $995,200
Baltimore 24005 Baltimore-Columbia-Towson, Md $517,500 $662,500 $800,800 $995,200
Calvert 24009 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Carroll 24013 Baltimore-Columbia-Towson, Md $517,500 $662,500 $800,800 $995,200
Charles 24017 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Frederick 24021 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Harford 24025 Baltimore-Columbia-Towson, Md $517,500 $662,500 $800,800 $995,200
Howard 24027 Baltimore-Columbia-Towson, Md $517,500 $662,500 $800,800 $995,200
Montgomery 24031 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Prince George'S 24033 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Queen Anne'S 24035 Baltimore-Columbia-Towson, Md $517,500 $662,500 $800,800 $995,200
Baltimore City 24510 Baltimore-Columbia-Towson, Md $517,500 $662,500 $800,800 $995,200

 

Massachusetts

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Bristol 25005 Providence-Warwick, Ri-Ma $426,650 $546,200 $660,200 $820,500
Dukes 25007 Vineyard Haven, Ma $636,150 $814,500 $984,525 $1,223,475
Essex 25009 Boston-Cambridge-Newton, Ma-Nh $598,000 $765,550 $925,350 $1,150,000
Middlesex 25017 Boston-Cambridge-Newton, Ma-Nh $598,000 $765,550 $925,350 $1,150,000
Nantucket 25019 Non-Metro $636,150 $814,500 $984,525 $1,223,475
Norfolk 25021 Boston-Cambridge-Newton, Ma-Nh $598,000 $765,550 $925,350 $1,150,000
Plymouth 25023 Boston-Cambridge-Newton, Ma-Nh $598,000 $765,550 $925,350 $1,150,000
Suffolk 25025 Boston-Cambridge-Newton, Ma-Nh $598,000 $765,550 $925,350 $1,150,000

 

Nebraska

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Lincoln 31111 North Platte, Ne $433,550 $555,000 $670,900 $833,750
Logan 31113 North Platte, Ne $433,550 $555,000 $670,900 $833,750
Mcpherson 31117 North Platte, Ne $433,550 $555,000 $670,900 $833,750

 

New Hampshire

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Rockingham 33015 Boston-Cambridge-Newton, Ma-Nh $598,000 $765,550 $925,350 $1,150,000
Strafford 33017 Boston-Cambridge-Newton, Ma-Nh $598,000 $765,550 $925,350 $1,150,000

 

New Jersey

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Bergen 34003 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Essex 34013 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Hudson 34017 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Hunterdon 34019 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Middlesex 34023 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Monmouth 34025 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Morris 34027 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Ocean 34029 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Passaic 34031 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Somerset 34035 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Sussex 34037 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Union 34039 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475

 

New York

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Bronx 36005 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Dutchess 36027 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Kings 36047 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Nassau 36059 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
New York 36061 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Orange 36071 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Putnam 36079 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Queens 36081 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Richmond 36085 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Rockland 36087 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Suffolk 36103 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475
Westchester 36119 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475

 

North Carolina

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Camden 37029 Elizabeth City, Nc $625,500 $800,775 $967,950 $1,202,925
Currituck 37053 Virginia Beach-Norfolk-Newport News, Va $458,850 $587,400 $710,050 $882,400
Gates 37073 Virginia Beach-Norfolk-Newport News, Va $458,850 $587,400 $710,050 $882,400
Hyde 37095 Non-Metro $483,000 $618,300 $747,400 $928,850
Pasquotank 37139 Elizabeth City, Nc $625,500 $800,775 $967,950 $1,202,925
Perquimans 37143 Elizabeth City, Nc $625,500 $800,775 $967,950 $1,202,925

 

Pennsylvania

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Pike 42103 New York-Newark-Jersey City, Ny-Nj-Pa $636,150 $814,500 $984,525 $1,223,475

 

Rhode Island

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Bristol 44001 Providence-Warwick, Ri-Ma $426,650 $546,200 $660,200 $820,500
Kent 44003 Providence-Warwick, Ri-Ma $426,650 $546,200 $660,200 $820,500
Newport 44005 Providence-Warwick, Ri-Ma $426,650 $546,200 $660,200 $820,500
Providence 44007 Providence-Warwick, Ri-Ma $426,650 $546,200 $660,200 $820,500
Washington 44009 Providence-Warwick, Ri-Ma $426,650 $546,200 $660,200 $820,500

 

Tennessee

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Cannon 47015 Nashville-Davidson--Murfreesboro--Frank $466,900 $597,700 $722,500 $897,900
Cheatham 47021 Nashville-Davidson--Murfreesboro--Frank $466,900 $597,700 $722,500 $897,900
Davidson 47037 Nashville-Davidson--Murfreesboro--Frank $466,900 $597,700 $722,500 $897,900
Dickson 47043 Nashville-Davidson--Murfreesboro--Frank $466,900 $597,700 $722,500 $897,900
Hickman 47081 Nashville-Davidson--Murfreesboro--Frank $466,900 $597,700 $722,500 $897,900
Macon 47111 Nashville-Davidson--Murfreesboro--Frank $466,900 $597,700 $722,500 $897,900
Maury 47119 Nashville-Davidson--Murfreesboro--Frank $466,900 $597,700 $722,500 $897,900
Robertson 47147 Nashville-Davidson--Murfreesboro--Frank $466,900 $597,700 $722,500 $897,900
Rutherford 47149 Nashville-Davidson--Murfreesboro--Frank $466,900 $597,700 $722,500 $897,900
Smith 47159 Nashville-Davidson--Murfreesboro--Frank $466,900 $597,700 $722,500 $897,900
Sumner 47165 Nashville-Davidson--Murfreesboro--Frank $466,900 $597,700 $722,500 $897,900
Trousdale 47169 Nashville-Davidson--Murfreesboro--Frank $466,900 $597,700 $722,500 $897,900
Williamson 47187 Nashville-Davidson--Murfreesboro--Frank $466,900 $597,700 $722,500 $897,900
Wilson 47189 Nashville-Davidson--Murfreesboro--Frank $466,900 $597,700 $722,500 $897,900

 

Utah

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Salt Lake 49035 Salt Lake City, Ut $600,300 $768,500 $928,950 $1,154,450
Summit 49043 Summit Park, Ut $636,150 $814,500 $984,525 $1,223,475
Tooele 49045 Salt Lake City, Ut $600,300 $768,500 $928,950 $1,154,450

 

Virginia

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Albemarle 51003 Charlottesville, Va $437,000 $559,450 $676,200 $840,400
Amelia 51007 Richmond, Va $535,900 $686,050 $829,250 $1,030,600
Arlington 51013 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Buckingham 51029 Charlottesville, Va $437,000 $559,450 $676,200 $840,400
Caroline 51033 Richmond, Va $535,900 $686,050 $829,250 $1,030,600
Charles City 51036 Richmond, Va $535,900 $686,050 $829,250 $1,030,600
Chesterfield 51041 Richmond, Va $535,900 $686,050 $829,250 $1,030,600
Clarke 51043 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Culpeper 51047 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Cumberland 51049 Non-Metro $535,900 $686,050 $829,250 $1,030,600
Dinwiddie 51053 Richmond, Va $535,900 $686,050 $829,250 $1,030,600
Fairfax 51059 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Fauquier 51061 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Fluvanna 51065 Charlottesville, Va $437,000 $559,450 $676,200 $840,400
Gloucester 51073 Virginia Beach-Norfolk-Newport News, Va $458,850 $587,400 $710,050 $882,400
Goochland 51075 Richmond, Va $535,900 $686,050 $829,250 $1,030,600
Greene 51079 Charlottesville, Va $437,000 $559,450 $676,200 $840,400
Hanover 51085 Richmond, Va $535,900 $686,050 $829,250 $1,030,600
Henrico 51087 Richmond, Va $535,900 $686,050 $829,250 $1,030,600
Isle Of Wight 51093 Virginia Beach-Norfolk-Newport News, Va $458,850 $587,400 $710,050 $882,400
James City 51095 Virginia Beach-Norfolk-Newport News, Va $458,850 $587,400 $710,050 $882,400
King And Queen 51097 Non-Metro $535,900 $686,050 $829,250 $1,030,600
King William 51101 Richmond, Va $535,900 $686,050 $829,250 $1,030,600
Lancaster 51103 Non-Metro $442,750 $566,800 $685,100 $851,450
Loudoun 51107 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Louisa 51109 Non-Metro $535,900 $686,050 $829,250 $1,030,600
Mathews 51115 Virginia Beach-Norfolk-Newport News, Va $458,850 $587,400 $710,050 $882,400
Nelson 51125 Charlottesville, Va $437,000 $559,450 $676,200 $840,400
New Kent 51127 Richmond, Va $535,900 $686,050 $829,250 $1,030,600
Powhatan 51145 Richmond, Va $535,900 $686,050 $829,250 $1,030,600
Prince George 51149 Richmond, Va $535,900 $686,050 $829,250 $1,030,600
Prince William 51153 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Rappahannock 51157 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Spotsylvania 51177 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Stafford 51179 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Surry 51181 Non-Metro $458,850 $587,400 $710,050 $882,400
Sussex 51183 Richmond, Va $535,900 $686,050 $829,250 $1,030,600
Warren 51187 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
York 51199 Virginia Beach-Norfolk-Newport News, Va $458,850 $587,400 $710,050 $882,400
Alexandria City 51510 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Charlottesville 51540 Charlottesville, Va $437,000 $559,450 $676,200 $840,400
Chesapeake City 51550 Virginia Beach-Norfolk-Newport News, Va $458,850 $587,400 $710,050 $882,400
Colonial Height 51570 Richmond, Va $535,900 $686,050 $829,250 $1,030,600
Fairfax City 51600 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Falls Church City 51610 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Fredericksburg 51630 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Hampton City 51650 Virginia Beach-Norfolk-Newport News, Va $458,850 $587,400 $710,050 $882,400
Hopewell City 51670 Richmond, Va $535,900 $686,050 $829,250 $1,030,600
Manassas City 51683 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Manassas Park City 51685 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475
Newport News City 51700 Virginia Beach-Norfolk-Newport News, Va $458,850 $587,400 $710,050 $882,400
Norfolk City 51710 Virginia Beach-Norfolk-Newport News, Va $458,850 $587,400 $710,050 $882,400
Petersburg City 51730 Richmond, Va $535,900 $686,050 $829,250 $1,030,600
Poquoson City 51735 Virginia Beach-Norfolk-Newport News, Va $458,850 $587,400 $710,050 $882,400
Portsmouth City 51740 Virginia Beach-Norfolk-Newport News, Va $458,850 $587,400 $710,050 $882,400
Richmond City 51760 Richmond, Va $535,900 $686,050 $829,250 $1,030,600
Suffolk City 51800 Virginia Beach-Norfolk-Newport News, Va $458,850 $587,400 $710,050 $882,400
Virginia Beach 51810 Virginia Beach-Norfolk-Newport News, Va $458,850 $587,400 $710,050 $882,400
Williamsburg City 51830 Virginia Beach-Norfolk-Newport News, Va $458,850 $587,400 $710,050 $882,400

 

Washington State

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
King 53033 Seattle-Tacoma-Bellevue, Wa $592,250 $758,200 $916,450 $1,138,950
Pierce 53053 Seattle-Tacoma-Bellevue, Wa $592,250 $758,200 $916,450 $1,138,950
San Juan 53055 Non-Metro $483,000 $618,300 $747,400 $928,850
Snohomish 53061 Seattle-Tacoma-Bellevue, Wa $592,250 $758,200 $916,450 $1,138,950

 

West Virginia

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Jefferson 54037 Washington-Arlington-Alexandria, Dc-Va- $636,150 $814,500 $984,525 $1,223,475

 

Wyoming

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Teton 56039 Jackson, Wy-Id $636,150 $814,500 $984,525 $1,223,475

 

Northern Mariana Islands

County 5-Digit County Code Metropolitan Area 1 Unit Limit 2 Unit Limit 3 Unit Limit 4 Unit Limit
Northern Island 69085 Non-Metro $524,400 $671,300 $811,450 $1,008,450
Saipan 69110 Non-Metro $529,000 $677,200 $818,600 $1,017,300
Tinian 69120 Non-Metro $532,450 $681,650 $823,950 $1,023,950

Fixed-rate & ARM Jumbo Mortgage Calculators

Use either of the following calculators to estimate your fixed or ARM jumbo loan payments. For people interested only in the principal & interest portion of the loan, we also offer a side-by-side calculator here which calculates fixed, ARM & IO-only loans.

Fixed-rate Jumbo Loan Calculator

Below is our FRM jumbo mortgage calculator. Click on the other tab above to switch to the jumbo ARM calculator. You can also view current local jumbo loan rates.

Description Amount
House price:
Downpayment:
Loan APR: (Get Current Rates)
Term (years):
Property taxes (%):
Homeowner insurance (%):
PMI (%):
Monthly HOA fees ($):
Closing costs (if financed in loan):
All-in monthly payment:
Principal & Interest:
Taxes, Insurance, PMI & HOA:
Amount Borrowed (exclusive of closing cost):

Jumbo ARM Loan Calculator

Description Amount

Home Loan Information

Home Price [?]:
Down Payment [?]:
Initial APR (%) [?]: See Current Rates
Lending Term (Years) [?]:

Rate Adjustments

Years Before 1ST Adjustment: [?]
Expected First Adjustments (%) [?]:
Months Between Subsequent Adjustments [?]:
Expected Subsequent Adjustments (%) [?]:
Lifetime Adjustment Cap (%): [?]

Other Costs of Ownership

Property Taxes (%) [?]:
Home Insurance(%) [?]:
PMI (%) [?]:
Monthly HOA Dues ($) [?]:
Closing Costs ($, if included in loan) [?]:

Your Initial Payment

Initial Monthly Principal & Interest [?]:
Monthly Taxes, Insurance + HOA [?]:
Full Initial Monthly Payments [?]:

Maximum Monthly Payments

Maximum P&I Monthly Payment [?]:
Monthly Taxes, Insurance + HOA [?]:
Maximum Payment With Other Expenses [?]:

Loan Totals

Amount Financed [?]:
Total Interest [?]:
Total monthly P&I Payments [?]:
Total Taxes, Insurance + HOA [?]:
Total Loan Payments + Other Expenses [?]:
Average Monthly Total [?]:

What Drives Mortgage Rates

The Federal Funds rate sets a baseline which is used to help guide other rates across the economy. For any given loan type the yield typically rises as either loan amount or duration rise. While most mortgages are amortized over 30-years, they tend to move inline with the 10-year treasury, as homeowners tend to move or refinace their home loans every 5 to 7 years. Lenders price mortgages above the soverign 10 year bond because they presume the 10-year treasury does not carry any default risk.

Fixed Rate vs Adjustable Rate Mortgages

Most people tend to choose fixed rate mortgages, however jumbo loans are available in both fixed and adjustable versions. Looking at the above chart it is clear rates are near historical lows, so those in need of stability who are looking to build equity in their home will likely want to choose fixed rates. Those who have high income levels may be more interested in deducting mortgage interest from their income taxes. Presuming they know the financial markets well & want the tax write off then a floating variable rate may make sense.

The Housing-led Global Recession

The American Dream

Luxury Watefront Home.

When people describe the "American Dream," it often includes a variety of things: education, good health, a happy family, money in the bank, and so on. For most people, this vision of the "American Dream" also involves having a place to come home to. Home ownership is sought by those who lack it, and fiercely protected by those who fear losing it. There is something comforting about being able to call a house your own.

Of course, these days it is rare that the house truly belongs to the homeowner. In the current housing market, obtaining a mortgage is typically a necessity in order to purchase a home. Few people are able to afford the cost of buying a home without financing. When a mortgage is taken out the homeowenr has effectively used his or her new home as a security backing the loan. As such, when a borrower is unable to make mortgage payments, the result is often foreclosure.

The Foreclosure Crisis

Prior to the recession about 252,000 homes were foreclosed annually. Between September 2008 and September 2012 about 3.9 million homes were foreclosed on - a rate nearly four times as high as the prevailing rate before the recession hit. Roughly twice as many prime borrowers lost their homes as did subprime borrowers.

Home Foreclosures by Category.

While loan delinquency rates have declined, many homeowners still have limited equity. Costal people in wealthy areas who were surprised by & could not understand the outcome of the 2016 presidential election need only look at how many homes across the midwest & Florida still qualified for HARP loan modification in 2016.

Harp Eligibility in 2016.

Those are homeowners who have conventional mortgages which were originated before June 1, 2009 & have less than 20% equity in their home.

The Impact of ZIRP on Asset Prices

The goals of the Federal Reserve's zero interest-rate policy (ZIRP) and quantitative easing (QE) programs after the 2007 economic crisis were to:

  • drive down the cost of debt to make refinancing easier
  • clean up the books of banks by over-paying for assets
  • push investors out on the risk curve
  • inflate asset prices like stocks, bonds & real estate

A decade after the crash housing prices have returned to the pre-crash peaks, but not when adjusted for inflation. A recovery driven by asset price inflation has drastically increased inequality. In wealthy areas like San Franciso the tech rebound was also boosted by hot money leaving China. This in turn led to many vital workers being pushed into long commutes to work. When China cracked down on capital flight, it left some neighborhoods in Los Angeles suburbs looking like ghost towns. In spite of the incredible absolute wealth in California the high cost of living means it has the highest poverty rate in the country.

Those Who Owned No Financial Assets Were Left Behind

While people who are priced out of hot areas, some of the cold areas have remained exceptionally cold nearly a decade after the crisis. According to the Financial Times the recovery has simply passed by many Americans.

More than 50m Americans live in districts that are mired in a “deep ongoing recession”, with falling employment and a shrinking business base, according to a report that highlights the fractured nature of the US recovery.

The problems in distressed communities have not developed overnight: most have seen zero net gains in employment and business creation over the whole of this century so far."

Increasing inequality - rather than an increase in poverty - often leads to a rise in crime. Areas with an elevated GINI coefficient see higher violent crime & this is one of the most robust relationships in the social sciences.

Citigroup ran the Obama cabinet & ensured their own bailout, while the costs of their shady loan practices were passed onto the rest of society.

"So what did they actually do. Well, first they didn't fix the problems, they made it worse, so that by 2007, when Bowen and Hunt are looking again, the rate at which Citi is lying to Fannie and Freddie is up to 80%. And the next thing, of course, that Rubin was sure that Citicorp was doing the right thing, is both Bowen and Hunt were retaliated against.

Citi, instead of top executives, instead of being grateful, a), of course, goosed their executive compensation. But b) decided hey, let's target FHA, now that Fannie and Freddie are out of it, for our frauds." - Bill Black

Now even Citi is warning against rising income inequality.

Rate Normalization

The Federal Reserve lowered rates and pushed QE to drive asset prices higher and cause a wealth effect. As the Federal Reserve lifts interest rates and winds down their balance sheet it should have the opposite effect on the market as the cost of debt goes up. If they can thread the needle this will mean fairly stagnant asset prices. If they get too far out in front of the market it could cause asset prices - including real estate - to drop.

Here is a map which shows how real housing prices have changed between

  • 2000 and 2016
  • the housing peak and 2016

While the past does not predict the future, seeing how homes have performed across various points in the economic cycle can help you get an idea of how real estate might perform while the boom continues & when a recession inevitably occurs.

 

Real Estate Market Performance by County from 2000 to 2016.

You can zoom in on the above map to view your local area here. The FHFA also offers an experimental home price index map with data going back to 1975 here. Since the early 1980s interest rates have been in a secular downturn & global debt levels have exploded. Asset price trends may change if rising interest rates cause debt to grow at a slower rate.