Jumbo loans

Despite your income, there are limits to the amount of money you can borrow with a conventional loan. That is because the companies that purchase the most conventional loans, Freddie Mac and Fannie Mae, will only buy loans under a certain amount. If you need to borrow over and above that limit, then a jumbo loan might be your best option.

In order to obtain a jumbo GMAC mortgage, you will have to meet higher qualification standards. In other words, income requirements are stricter and credit flaws are less tolerated. Furthermore, interest rates are slightly higher than those of conventional loans. That is because it bigger loans mean more risk for the lender.

GMAC mortgages offer two types of jumbo loan: fixed rate and adjustable rate. The type that will accommodate your needs depends on your willingness to assume risk and whether you plan to move within the first five or ten years.

A fixed-rate jumbo GMAC mortgage is most appropriate for borrowers who intend to remain in their new house for a long time. This type of loan is stable, meaning that the interest rate will never increase during the life of the loan. Many borrowers prefer this type of loan because they know their monthly payment will never change.

An adjustable-rate jumbo GMAC mortgage is better for borrowers who intend to move after a few years. The introductory rate for this type of mortgage is relatively low. That said, this type of loan involves more risk, because interest rates might rise over the life of the loan. Borrowers have no guarantee that their monthly payment will not increase.