Is the JUMBO Market Loosening Up?
From The Keeping Current Matters Blog
Posted March 8, 2010:
There has been an improvement in the interest rates available for Jumbo Mortgages, and that is encouraging news. In addition, some lenders are even lowering the amount of down payment required in the Jumbo loan programs- which is even more good news.
Let’s begin with some basics.
Jumbo mortgages are those mortgages which exceed the Fannie Mae/Freddie Mac acceptable loan amounts (referred to as conforming loan amounts). Those thresholds are determined annually on a county-by-county basis based on average sales prices of homes and the number of units in the home. Where I come from (Long Island, NY) is considered a “high-cost area”, which allows us to close Conforming Loans on a one-family home up to $729,750. Any mortgage, above that $729,750 limit, is classified as Jumbo.
Now let’s talk a little history.
There was a time in the Mortgage World that we refer to as “B.S.” (Before Subprime). In that world, there was a .25% to .375% higher interest rate on Jumbo Mortgages. That additional rate was the result of two factors- risk and supply.
