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Jumbo mortgage loans approvals have become much more difficult with the recent financial and mortgage meltdown. Many lenders who previously offered jumbo loans have been much more selective in their origination of these loans. In fact, all mortgage loans in general have become much more difficult to get.

Jumbo mortgage loans get their name because of the amount of their value. Fannie Mae and Freddie Mac, the leading purchasers of US residential mortgages consider loan values above $417,000 to be non-conforming or jumbo mortgage loans. However, that amount is specific to different regions of the country.

Actual jumbo mortgage loans approvals limits can be 125% over the area’s median price. They have a high-end limit, which is 175% of the $417,000 amount, which equates to a maximum of $729,750 in the most expensive areas of the country.

Jumbo mortgage loans are riskier than conforming loans from the lender’s perspective. Many jumbo loans are luxury residences that are harder to resell at full market value when times are tough in the general economy. With today’s financial difficulties, including uncertainty in the job market, many people are hesitant to get themselves saddled with a high monthly mortgage.

If you live in one of the more expensive real estate areas like California or Hawaii, jumbo mortgage loans approvals are critical to finding a basic house. For example, in Cincinnati, Ohio a $525,000 loan will buy you a lot of house in a good neighborhood. In San Francisco, California, a $525,000 mortgage loan will buy you very little, if anything in a house.

So if you live in the more expensive areas in the country, you will feel the impact more harshly when jumbo mortgage loans are harder to get approved. All economic recessions eventually fade into the past, and so will be the case with the current crisis. When the economy improves and the capital markets are flush again, jumbo mortgage loans will become widely available.

However, until that time arrives, many of you will find jumbo mortgage loans approvals difficult to get unless you have excellent credit and a large amount of money to use as a down payment. For those trying to sell a house where a jumbo mortgage loan is needed may have to wait a little longer to sell until the market regains its strength.

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