Getting super jumbo loans can be a little more tricky than you might think. Even though the people who are usually applying for super jumbo loans are people that 1) have more money, 2) have higher paying jobs, and 3) have more assets to back themselves with, they still can find it hard to find a lender who will give them such a loan.

The problem is not that lenders don’t want to make the loan – the problem is that lenders have to take on more risk with a super jumbo loan then they would otherwise take with mortgage loans less than the current jumbo and super jumbo limits. The reason for this is two fold:

First, super and jumbo loans are not back by the federal government. While the government wants everyone to be able to get into a home, they do not believe that they need to subsidize the ‘wealthy’ when it comes to the home purchase like they do with the middle class of America. That’s just the way it is, and because of this Freddie Mac and Fannie Mae will not back/buy such loans from the banks – effectively making such loans more expensive and more risky for the bank to process and hold.

Second, super jumbo loans are also more risky when they go into default than traditional mortgages. Because a super jumbo mortgage is on that is for more than $650,000 there is naturally going to be less demand for those homes (i.e. there are less rich people in the world and the USA than middle class Americans) than other homes. This makes it harder for the bank to sell in case of foreclosure.

However, do not get discouraged if you find yourself falling into this category – just realize up front that you will possibly have to put a little more cash down to get the loan than you otherwise would, or look for a home that falls withing the regular categories.

Related posts:

1. Is Personal Assurance on Commercial Business Loans Okay?
2. Loans for Self Employed – The Best Alternative to Traditional Banking and Lending Institutions
3. Student Loans Are Easy To Get, Even If You Have Bad Credit