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California Jumbo Mortgage Loans - How to Avoid Overpaying

Louie Latour

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The high cost of real estate in California forces many homeowners into Jumbo mortgage loans. What are jumbo loans? Any mortgage amount that is higher than the conforming loan limit is considered a jumbo mortgage. Here are several tips to help you avoid paying too much for your California mortgage loan.

The conforming loan limit is set each year by Fannie Mae and Freddie Mac and is the limit for traditional mortgage lending. In 2007 this limit is $417,000; if your home is valued above this limit you may be required to use a Jumbo mortgage loan. The problem with using a Jumbo mortgage is that you will be required to pay a higher interest rate for the loan.

This problem of qualifying for a higher interest rate with a jumbo mortgage is magnified with the high cost of California real estate. You might be able to avoid jumbo mortgage rates by financing your home with a combined first and second mortgage for the balance you need. Many lenders now offer loan programs to help California homeowners avoid jumbo mortgage rates in this manner.

Another serious problem for California homeowners is Yield Spread Premium. Any markup of your interest rate, jumbo or not, will be magnified by the high cost of your home and you will pay thousands of dollars every year unnecessarily. Yield Spread Premium is the markup of your mortgage interest rate to boost your loan originator's commission. You can learn more about your jumbo mortgage options in the State of California with a free mortgage tutorial.

To get your FREE six-part Mortgage Refinancing Tutorial, visit using the link below.

Louie Latour specializes in showing homeowners how to avoid costly mortgage mistakes and predatory lenders. To get your hands on this free video tutorial: “Mortgage Refinancing - What You Need to Know, " which teaches strategies for finding the best mortgage and saving thousands of dollars in the process, visit .

Claim your free mortgage refinancing tutorial today at:

California Jumbo Mortgage


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