Mortgage interest rates have dropped significantly in the past year and everyone wants to take advantage of the savings. Those who have jumbo loans – mortgages with balances over the conforming loan limit of $510,400 in most areas – may wonder if they can refinance their loans too. The answer is a definite yes! There may be some additional requirements, but jumbo loan holders can absolutely benefit from today’s lower rates.
Because jumbo loans involve such large amounts of money, the requirements for refinancing are typically stricter than with a conforming limit refinance. These might include the following:
Not only have interest rates been falling, but home prices have continued to rise, creating huge equity gains for homeowners. Jumbo loan borrowers can take advantage of that equity with a jumbo cash-out refi, where they take out a loan larger than their current one and pocket the difference in cash for projects like renovations or college tuition.
Mortgage interest rates are not usually much higher for jumbo loan refinances than for conforming loans. The rate you get will largely be decided by your credit score and your loan-to-value ratio.
Even if it requires a little extra effort and tighter requirements, refinancing a jumbo loan can provide borrowers with very worthwhile mortgage savings.
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