What Is an FHA Jumbo Home Loan Mortgage?

When someone applies for a conventional mortgage loan, there are limits to the price of the home they can borrow; it they are looking at a property that costs more than that amount that has been set by the government, they need to look into a jumbo mortgage. For those who have looked into FHA home loan mortgages, until 2008 the most that they could borrow was the loan limit for a given area. However, with the Economic Stimulus Act of 2008, the government acknowledged that, in many areas, home prices were higher.

Because of this, and because the sales of existing homes was coming to a screeching halt, an FHA jumbo home loan mortgage was made available. Now, thanks to the Economic Stimulus Act of 2008, it is possible for buyers in many markets to apply for and secure an FHA jumbo home loan mortgage, a larger loan that stretches far beyond the reaches of a traditional FHA mortgages.

The reason that an FHA jumbo home loan mortgage was made available to some borrowers is simple: an FHA jumbo home loan mortgage is now available to borrowers in hopes that, by enabling borrowers to access more money, the overall economy in many areas will improve. Rather than more expensive homes sitting empty indefinitely, an FHA jumbo home loan mortgage allows first time buyers along with buyers with less than ideal credit to purchase these properties when they are looking for a home.

Traditionally, a lender who would have concerns about approving such an applicant would either increase the interest rate of the mortgage or simply not qualify a borrower for the full amount. With an FHA jumbo home loan mortgage, however, lenders recognize that the government is willing to guarantee the loan. As a result, more financing is available to those looking to purchase a home – even if the home that buyers are looking at is more expensive.

Of course, at this point in time, an FHA jumbo home loan mortgage is only going to be available throughout 2008; in January 2009 the limits are expected to drop again unless legislation that is before the House and Senate is approved. This information is important for two reasons. First, it's necessary for home buyers to be aware of both the limits and availability of an FHA jumbo home loan mortgage. It is also important for those who have financed their homes and are looking into an FHA jumbo home loan mortgage to refinance and lower their monthly payments.

When it is possible to take advantage of an FHA jumbo home loan mortgage, what many home buyers and home owners are going to want to consider is their ability to get financing. With an FHA jumbo home loan mortgage, both home buyers who are looking for more expensive homes and home owners that are looking to change the rate and terms of their mortgages will be able to fully consider their options without the stress of loans that are not backed by the FHA.