The Difference Between Jumbo and Conventional Loans
Our friend Jarret Hodson joined us recently to talk about a creative solution he was able to come up with for one of his homebuyers. Here’s what happened.
Today we’ve got our No. 1 mortgage expert, Jarret Hodson with Midland Mortgage Corp, joining us to talk a little bit about the difference between a jumbo loan and a conventional loan.
We all know that Charleston home prices are going up, pushing more and more buyers into the jumbo loan category. A jumbo mortgage loan is a loan that covers any amount over $453,000, which is the maximum amount that you can get for a conventional loan.
Jarret just had a scenario last week where a client was deciding between the two. The home they were looking at had a $680,000 purchase price. The traditional jumbo loan with 10% down had a rate of around 5.5% for a $612,000 loan. The mortgage payment here, not including tax and insurance, was $3,475.
However, Jarret was able to get them a better deal by getting a conventional mortgage of $453,100 followed by a home equity line of credit (HELOC) to cover the rest of the purchase price. On a home equity line of credit, the payments are much smaller. With the same 10% down on these loans, his payment only ended up being $3,021. They were able to save him over $400 per month on his mortgage payment, which will equate to tens of thousands of dollars through the life of this loan.
If you want to learn more about which route could be better for you if you’re thinking of buying a home, don't hesitate to reach out to Jarret at (843) 277-9304 or send him an email to [email protected].
If you have any other real estate related questions for myself or my team, don’t hesitate to reach out and give us a call or send us an email today. We look forward to hearing from you soon.