Why is my mortgage broker only offering me a jumbo? (insurance, loan)

[maurenemm]

I'm confused and think maybe I'm missing something basic. DH and I are looking to buy up to a $650K home (maximum) in Montgomery county, Maryland - a suburb of Washington DC. We will put down 15% or 20%. I've gone to the Fannie Mae website and see that Montgomery county is a "high cost" living area and the loan limit is $625.5K.

So I'm confused as to why the broker only talked about a Jumbo loan. Aren't we eligible for a conforming loan?

I did read something that kinda suggested/hinted that conforming loans at these higher limits (above the standard $417K) are not always being offerred in practice. Could that be the case here?

[ShanetheMortgageMan]

Your loan amount would be eligible for a conforming jumbo loan - yes.

Ask the mortgage broker this is a conforming jumbo or non-conforming jumbo loan program. If it's a non-conforming jumbo loan program ask why can't they offer you a conforming jumbo loan program from Fannie Mae or Freddie Mac.

[maurenemm]

Ah....Thank you Shane. I didn't know that he could mean "jumbo conforming." Is that the same thing as "super conforming"?

[ShanetheMortgageMan]

Yes. Conforming loan limits cut off at $417, but certain high-cost counties have a conforming jumbo loan limit that can go up to $729,750 in the contiguous US (higher in Alaska, Hawaii) for 1-unit properties.

Freddie Mac's version is called Super Conforming. Fannie Mae's version is called High Balance.

Super Conforming Mortgages - Freddie Mac
https://www.efanniemae.com/sf/mortga...ancematrix.pdf

Non-conforming loan amount is anything that exceeds the conforming loan limit for that county. So it could be $417,001 in one county and $729,751 in another. It can also be $417,001 in the county with a conforming loan limit of $729,750 - because the non-conforming jumbo loan program would still exist/could still finance loan amounts of $417,001 anywhere in the U.S., it wouldn't be as attractive of terms as a conforming jumbo loan amount of $417,001 however.

[SmartMoney]

Originally Posted by maurenemm

I'm confused and think maybe I'm missing something basic. DH and I are looking to buy up to a $650K home (maximum) in Montgomery county, Maryland - a suburb of Washington DC. We will put down 15% or 20%. I've gone to the Fannie Mae website and see that Montgomery county is a "high cost" living area and the loan limit is $625.5K.

So I'm confused as to why the broker only talked about a Jumbo loan. Aren't we eligible for a conforming loan?

I did read something that kinda suggested/hinted that conforming loans at these higher limits (above the standard $417K) are not always being offerred in practice. Could that be the case here?

They are all the same - If you have at least 10% to put down, it would be in your best interests to get a second trust if you don't have enough to put 20% down. Mortgage insurance is available, but chances are you are above the income level that can deduct it. Interest from a second is still deductible (at least the last time I looked).

The loan limits are 729K until September 30th, after which, they will drop to 625K for the Agency Jumbo, which will then be for loan amounts $417,001 to $625,000.