A Jumbo Adjustable Rate Mortgage (ARM) is a mortgage loan that exceeds the maximum loan amount established by Fannie Mae and Freddie Mac. A jumbo ARM loan is very similar to a conventional ARM loan in that the loan has an interest rate that is locked for a period of time, but then transitions to an adjustable rate for the remainder of the loan.
Jumbo ARM loans are amortized over 30 years, but only have fixed rate periods ranging from a 3 years, 5 years, 7 years and 10 years. A jumbo ARM mortgage is considered riskier and therefore has a higher rate than a conventional ARM mortgage. Historically the gap was usually ½ of a percent. Starting in 2016, the gap between the Conventional fixed rate mortgage and the Jumbo fixed rate mortgage is as low as ¼ of a percent.
If you would like to learn more about jumbo ARM loans, our team of friendly experts are here to assist. We will be glad to help you determine if a jumbo ARM loan is right for you. Contact us today.
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