Jumbo mortgages are large loans, which are often restricted only to homebuyers within specific income brackets. As more lenders offer these large mortgages, borrowers may find that they can negotiate better rates and even get some individualized loans. With more lenders to go to, shopping around for a jumbo mortgage is now a bigger option than ever.
According to Insider Mortgage Finance CEO Guy Cecala, of all mortgages made to first-time homebuyers in the first quarter of 2016, 20.3% were jumbo mortgages. That's an increase of just over one percent from 2015 when jumbo loans stood at 18.9%.
One thing helping borrowers is that few jumbo mortgages are sold off to investors. Instead, banks and other lenders end up keeping most of these large loans themselves. This means they are not subject to investor regulations or the rules of Freddie Mac and Fannie Mae, meaning that lenders are often able to work with borrowers to make mortgages that fit their needs. This individualized approach means that more borrowers will be able to afford a jumbo mortgage.Lenders also process each jumbo mortgage by hand rather than running it through an automated process. A real person makes judgment calls, based on individual applications, rather than using a computer to process the numbers. The lender can therefore take into account extenuating circumstances and make exceptions when necessary.