A jumbo refinance loan, or otherwise the non-conforming refinance loan, is a loan which does not meet the conventional loan guidelines that are set by Freddie Mac and Fannie Mae. In most cases, jumbo refinance loans surpass the maximum loan that is set and is quite hard to get in the modern housing market. This article from Arizona Mortgage Pros will shed more light on jumbo refinance loans Arizona.
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Rates and Terms of Jumbo Refinance Loans
The jumbo rate and refinance can either convert the adjustable-rate mortgage into a fixed rate or lower the current interest rate. This, therefore, leads to lower monthly payments and savings over the term of the loan.
In the home equity, jumbo refinances, borrowers are allowed to take out a new jumbo loan other than the current one. You will pay the difference between the two loans during the closing of the loan. The extra money from the difference can be used for other factors such as debt consolidation, investing the equity, and home improvement.
The custom line of credit works like any other home jumbo refinance loan. It refinances the loan to a custom credit line helping borrowers to pay for other essential expenses. The credit line can also be used to pay for college tuition, medical bills, investments, and home improvements.
Factors to Consider
It is worth noting that the rates of interest usually are higher on the jumbo refinance loans compared to the conforming loans. The rates can either be fixed or adjustable, and there can also be temporary buy-downs and the interest-only loans.
Interest-only loan option does not allow the borrower to build equity via the monthly interest-only payments. Instead, the borrower makes voluntary principal payments to build equity during the interest-only period when making the payments. The credit line option, on the other hand, has a variable interest rate which can raise or lower the monthly fees depending on the interest rates fluctuations. With this option, you can change a part of or the whole outstanding credit line to a fixed rate that is repaid in a five to twenty-year term.
To get more information on the jumbo refinance loans in Arizona, reach out to our Arizona Mortgage Pros today and get pointed in the right direction.