Explaining Colorado Jumbo Vs. Conforming Mortgages

When you are looking for a home mortgage in Colorado, you need to know the different types of mortgages, especially the difference between a jumbo Colorado loan and a conforming Colorado mortgage. By knowing how these loans are determined, you will be able to find the one that works the best for you. With information about the types of mortgages, you will be able to work with a lender to figure out the best terms that you will qualify for. As an informed customer, you are bound to get a quality Denver mortgage.

The Definitions of Colorado Jumbo Mortgages and Conforming Home Loans

The definitions of both the conforming Denver mortgage and Jumbo Colorado mortgage are set by two companies — Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac have federal government charters to buy mortgages, so they have the task of coming up with the business standards and definitions for mortgage lending.

The main difference between a conforming loan and a jumbo loan is amount of the loan. Colorado mortgages will for the most part be conforming loans, being worth an amount on the smaller side of the market. Jumbo mortgages will cover the high-priced homes in the Denver area.

The price line between the two types of loans is set each year based on the previous year’s housing market. At this time, a Denver mortgage is defined as a conforming loan when it is worth less than $417,000 for a single family home (first mortgage) or less than $208,500 (second mortgage). The number of units in multi-family properties will have a different threshold. Loans in excess of these amounts are jumbo Colorado mortgages. This covers all loans in Colorado, but may be different elsewhere and may be raised following the current stimulus package.

All About Colorado Jumbo Loans

The amount of the loan is the key factor in determining if a Denver mortgages is a jumbo loan. The jumbo mortgage products in Colorado are otherwise just the same as a conforming loan. The loan terms can be changed in many different ways, including fixed rates, adjustable rates, and interest-only programs. All of it will depend on which program you sign up for when getting a Colorado jumbo mortgage loan from a lender

Don’t forget that since the market is so small for jumbo mortgages there will be a tighter rein on the qualifications. This is true of Colorado mortgages as well. Since the borrower is taking out such a large sum, they will have to meet such strict standards such as a higher credit score and lower loan to value ratios.

With the information about jumbo Denver mortgages and conforming Colorado mortgages understood, you will be able to get on the right track in getting your loan. Next, you will need to find an experienced and trusted Denver mortgage lender who has dealt with customers in a position similar to yours. When you find one, they will explain to you the more specific programs you have to choose from, whether you need a conforming mortgage or jumbo Colorado mortgage loan. With a lender, you can find which one fits you best.



This article is written by J.B. of 1st American Mortgage and Loan, LLC, a Colorado mortgage lender who offers access to information on obtaining a Colorado mortgage loan as well as other information on loans in Colorado, online mortgage quotes, and rates through his website TrueMortgageQuote.com.

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