A jumbo mortgage is almost always set above conventional conforming loan limits. They reflect the average size of loans nationwide and the limits or maximum dollar value that will be purchased is decided by Fannie Mae and Freddie Mac. As of this writing that limit is set at $417,000 in the continental United States and at $625,000 in Hawaii, Alaska and several U.S. territories including the Virgin Islands and Guam.

When more money is required to fund a jumbo mortgage, insurance companies and banks will fill the void. While as we stated before, the jumbo mortgage rate is typically greater than a conforming mortgage, the rates will vary depending on the amount of mortgage required and the type of property it covers. Any loan that is greater than $650,000 is considered to be a super jumbo mortgage.

The options that make up a jumbo mortgage are quite similar to those of a traditional mortgage. In general, Jumbo mortgages will require a greater down payment (usually 5% more) than a traditional mortgage. Jumbo mortgage rates can be fixed or variable, but more often than not variable. The risk inherent in taking on a jumbo mortgage is that if interest rates increase then the payments can become quite expensive.

Refinancing a jumbo mortgage rate is also more expensive than refinancing a conventional conforming loan because the closing costs are greater. Because this can become a rather costly endeavor for the borrower the lender will oftentimes offer discounts or waive the mortgage tax to make it more affordable.

Shopping around to different banks and financial institutions is advised to find the best deals on a jumbo mortgage rate and do not forget to factor in all the costs and fees associated with the loan as well.