A fixed rate jumbo mortgage is a home loan that is repaid over a specific timeframe at a fixed interest rate. Jumbo mortgages exceed the current Fannie Mae and Freddy Mac loan purchase limit of $417,000 for a single-family home, as of July 2010. Jumbo mortgages usually require a 20% down payment and stronger income documentation. It’s likely that the monthly payment on your jumbo loan cannot exceed 38% of your pre-tax income.
Jumbo mortgages usually have a higher interest rate. The rates can be from .25% to 1.5% higher than the average conforming mortgage rate. Sometimes a lender will require two separate home appraisals for a jumbo mortgage in order to get a side-by-side comparison. A property purchased with a jumbo loan tends to be more expensive and larger in size, so the two-appraisal requirement ensures a more objective value of the property.