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My understanding was that before the financial crisis, there were many options for getting non-conforming loans, including jumbo mortgages, second mortgages, HELOCs, etc.

Are there still alternatives to taking a jumbo mortgage in today's financial climate?

Edit: sorry, my question was not clear enough.

There was a period of time (maybe 2-3 years ago) where I was trying to refinance an existing mortgage (which at the time was a jumbo), and no mortgage company/broker would even discuss doing a conforming loan + a HELOC/second mortgage. It simply wasn't available at the time.

What I currently want to do is avoid doing a jumbo. Just as an example, if I needed to borrow $600K, I would want to borrow it as a 30-year conforming (say, $400K) plus a second mortgage as an ARM (say, $200K). This would allow me to pay down the second mortgage early but still take advantage of the low long-term rates.

So the questions comes down to whether mortgage companies are doing these kinds of mortgages anymore. Thanks for your comments.

  • How is the mortgage you are looking for not conforming? – Alex B Mar 25 '12 at 1:32
  • In my area (Chicago) conforming loans max out at $417K. – Phil Sandler Mar 25 '12 at 4:15
  • I'm not sure I understand you.... IMHO jumbo mortgages, second mortgages, HELOCs - never left. I have a HELOC that I got very recently. What is the question exactly? – littleadv Mar 25 '12 at 5:23
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    I think @phil wants to know if you can still get loans larger than $417k. I think the answer is yes. :) – Alex B Mar 25 '12 at 5:33
  • Thanks for the responses. See my edits (from last week--forgot to comment here). – Phil Sandler Apr 2 '12 at 18:46
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Yes, banks still offer combo loans, but it is going to depend on the appraised value of your home. Typically lenders will allow you to finance up to 80% loan to value on the first mortgage (conforming loan amount) and 95% combined loan to value on a HELOC.

I would start by checking with your local credit union or bank branch. They have more competitive rates and can be more flexible with loan amount and appraised value guidelines.

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You should also be aware that there are banks that do business in the US that do not deal with Fannie Mae, and thus are not subject to the rules about conforming loans. Here is an example of a well-known bank that lists two sets of rates, with the second being for loans of $750,000 or more (meaning the first covers everything up to that)

https://home.ingdirect.com/orange-mortgage/rates

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