Jumbo Loans for Your Dream Home

A jumbo loan, also sometimes referred to as a non-conforming loan, is a mortgage that exceeds the limits set by the Federal Housing Finance Agency (FHFA). In 2024, the limit for a conforming conventional loan in Wisconsin is $766,550. Any loan above that amount, you would likely need a jumbo loan.

Kohler Credit Union offers both fixed and adjustable jumbo loan options.

• Jumbo Fixed-Rate Mortgage: With a fixed-rate jumbo loan, your interest rate does not change for the life of the loan (or term). This product can be used for purchasing or refinancing a home. Some of these loans are held and serviced by Kohler Credit Union.
• Jumbo Adjustable-Rate Mortgage: An Adjustable-Rate Mortgage (ARM) has an introductory period with a lower interest rate than a fixed-rate mortgage. After the introductory period has expired, typically 7 or 10 years, the rate can move up or down with market changes.  This product can also be used for purchasing or refinancing a home. These loans are typically held and serviced by Kohler Credit Union and can offer favorable terms.

A Jumbo loan is right for you if you need a loan that is over $766,550, the limit set by the Federal Housing Finance Agency (FHFA).

One of the biggest advantages of a fixed rate mortgage is that the rate won’t change at any point throughout your loan. In other words, your monthly payment of principal and interest won’t change. (Please note your payments may fluctuate due to property taxes or homeowner’s insurance changes, because these expenses are typically included into your escrow which is bundled into your total monthly loan payment).

Fixed-rate mortgages tends to be popular choice when it comes to financing a home due to predictability for budgeting purposes, especially for first time homebuyers. Kohler Credit Union offers fixed mortgage terms of 13, 15, 20 and 30 years.

The disadvantage is that the interest rate on a fixed rate mortgage is typically going to be higher than that of an adjustable-rate mortgage, which may limit how much house you can afford. And because it is fixed for the entire length of your term, if mortgage rates decrease, your interest rate would not reflect that change.

The main benefit of an adjustable-rate mortgage (ARM) is that you can typically take advantage of lower rates and they may be easier to qualify for with less cash down. Qualifying borrowers typically also have a lower payment, which allows them to buy a more expensive home than they otherwise could with a fixed mortgage. It also offers a more affordable option for borrowers who move frequently to buy a house.

A popular choice for adjustable-rate mortgage is the 5/1 ARM. The 5/1 ARM’s introductory rate lasts for five years. (That’s the “5” in 5/1.) After that, the interest rate can change once a year. (That’s the “1” in 5/1.) Kohler Credit Union offers 1/1 ARMs, 3/1 ARMs, 5/1 ARMs, 7/1 ARMs and 10/1 ARMs.

Most people’s main concern with an adjustable-rate mortgage is that the rate can adjust after the lock period ends. After the lock period ends, the interest rate on an ARM fluctuates based on the index it’s tied to. The index is an interest rate set by the market and your ARM paperwork will tell you what index your mortgage follows. Mortgage rates can be unpredictable, however since the start of the pandemic in 2020, they have hit record lows.

The best way to find out the exact requirements are to speak with one of our knowledgeable mortgage originators. Kohler Credit Union takes several factors into consideration when it comes to lending decisions, including, but not limited to, credit score, payment history and appraisal value.

One of the advantages of financing jumbo loans with Kohler Credit Union is that we require a smaller down payment than many other lenders (as little as 5% down). Other fees for jumbo loans can vary depending on which type of jumbo loan is right for you, so it is best to speak with one of our mortgage originators on your options and what fees apply.