If you buy apparel from "big and tall" clothing stores, you're used to paying more and having less to choose from. "Regular guys," on the other hand, benefit from a wider selection of products and more competition between retailers.

Jumbo mortgage refinancing is the same way -- a jumbo loan is harder to find and more expensive than smaller Fannie Mae, Freddie Mac or FHA loans.

Everyone wants the best mortgage rates, but shopping wisely is even more important for homeowners with jumbo mortgages. When your home loan is large, even a small difference in the mortgage rate can have a big impact on your wallet. With mortgage interest rates so low, it's a great time to refinance. This can be especially true if you have a jumbo mortgage loan: Bigger mortgage = bigger savings when you refinance. It's true that homeowners with jumbo mortgages do face greater challenges finding and closing refinance mortgages. Fortunately, the rewards are greater as well.

Difficulties Associated with Jumbo Mortgage Refinance

Not all lenders are prepared or willing to do these non-conforming loans. A conforming loan is one that "conforms" - or adheres to - the underwriting guidelines set forth by government sponsored enterprises such as Fannie Mae and Freddie Mac. The conforming loan rate is $417,000 right now. Anything more than that is considered a jumbo mortgage and doesn't have the same backing by a government sponsored enterprise. In some areas considered high-cost, though, you might not be considered as having a jumbo mortgage unless the amount is higher than $729,250.

Because lenders are dealing with such large amounts in jumbo loans, they are taking on a big risk. That's a lot of money to lose if you end up defaulting on your jumbo mortgage loan, and to compensate for that risk mortgage rates for jumbos are typically higher than for conforming loans. The market for jumbos, however, has eased up in recent months

Advantages of Refinancing Your Jumbo Mortgage

The main advantage to refinancing your jumbo loan is that you can save a great deal of money over the life of your loan. Let's say you have a mortgage balance of $450,000 at 7%. Using a refinance calculator, you can figure what would happen if you qualify for a new interest rate of 5.5%, and you refinance for a 30-year term. Your new payment would be $2,555.05 a month, instead of $2,993.86. If you refinanced for a 25-year term instead, you would pay $2,763.39 a month. You'd still save money each month, and you would save even more in interest over the life of the mortgage.

Another way you can benefit from refinancing your jumbo mortgage is if you have paid down enough of your principle so that the balance is below the conforming amount. If you have paid down your jumbo loan far enough, it is no longer jumbo. This means that, instead of refinancing your mortgage as a jumbo loan, you can refinance it as a conforming loan. This will provide you with more options when it comes to choosing a lender, as well as give you access to even lower interest rates.

Everyone wants the best mortgage rates, but shopping wisely is even more important for homeowners with jumbo mortgages. When your home loan is large, even a small difference in the mortgage rate can have a big impact on your wallet.

If possible, it is a good idea to consider refinancing your jumbo loan.