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January 16, 2009
Jumbo Limits-Worth Refinancing?
First, can anyone tell me conclusively what the current limit is for a jumbo vs. conforming loan in NYC (on an apt.)? I'm reading mixed things. And is it likely to change soon? I read something about a Dec. 31 '08 deadline on the last decrease?
Also, would like to hear opinions on how big a drop in rates (from one's own current rate) makes it "worthwhile" to refinance? We currently hvae 6%, and now that I'm hearing it's dropping below 5% (assuming we can qualify for conforming) I'm starting to think... Some years back I refinanced on my previous apartment (with the same lender I have now, Wells Fargo) and I remember the closing costs being only be a couple thousand and they got tacked onto the new loan balance, so it was really painless, no out-of-pocket. Is the same scenario likely today?
(Apologies for repeating, I know there's been lots of discussion on these topics lately, but I've searched and not finding exactly what I'm asking...)
Thanks in advance for the insights!
Comments
I don't know about jumbo, but we just yesterday completed a refinance that was completely painless. fees rolled in, no out of pocket costs. Went from 6.5% to 4.875%. Same bank as before (Citi)
Good luck!
Posted by: WTbound at January 16, 2009 9:56 AM
OK, this is weird--it seems my post got "re-posted"... The heading and text are *slightly* different from what I originally posted, and the time is off too (I posted around 9:30 or so)... What's up? Did something go wrong with my original post?
Posted by: Brownstonerlogin at January 16, 2009 11:18 AM
(Oh wait, I see--looks like I got editorial intervention for a better front-page lead-in... ;)
Posted by: Brownstonerlogin at January 16, 2009 11:20 AM
$800,775 is the limit for a two-family. just got a quote this week.
Posted by: brownstoner at January 16, 2009 11:24 AM
my bank is Wells Fargo and I called yesterday and person said the limit was 417k (for a co-op), altho I'm not 100% sure that's right!
Posted by: Ringo at January 16, 2009 11:31 AM
WTbound, did you have to get a new appraisal? Did you go through the bank, or did someone else negotiate it for you? We're at %7.25 so you make it sound very appealing!
Posted by: mshook at January 16, 2009 11:36 AM
Absolutely impossible to get through to Wamu to even inquire about refinancings.
Posted by: PPSer at January 16, 2009 11:44 AM
we were quoted 4.875% for the conforming portion for a 30-year fixed
Posted by: brownstoner at January 16, 2009 11:44 AM
brownstoner, what do you mean by "conforming portion"? Does that mean you can get the conforming rate for the portion of your loan that's up to the conforming limit, and then the jumbo rate for the remaining?
Posted by: Brownstonerlogin at January 16, 2009 11:48 AM
Can someone explain exactly what "conforming" means in this context?
Posted by: Park Sloper at January 16, 2009 11:59 AM
Park Sloper, "conforming" just means the loan amount is below the limit federally defined as "jumbo." No idea why the term "conforming" is used (what exactly is does it conform to?)... Rates are lower for conforming, higher for jumbo (because it's assumed that a loan for that higher amount is a higher risk for the lender).
Posted by: Brownstonerlogin at January 16, 2009 12:07 PM
Brownstoner - Who gave you the quote of 4.875%? Wells Fargo just quoted me 5.25% for a three-family conforming (assuming my house appraises with 25% equity -- I put in 18% 2 years ago, so it's iffy). The extra 5%, I am told, is a cushion for distressed areas -- they said NY qualifies under this category, but I'm in Bed Stuy, so I'm not sure what the deal really is. Thanks.
Posted by: MacD at January 16, 2009 12:15 PM
Happy to see this discussion topic. Wondering myself about the new jumbo limit I read about in the NYT.
-We live in a co-op.
-Currently have an interest-only loan which kicks into a fixed rate loan after the first 10 years. Rate for first 10 years is 6.375%
-It is a jumbo loan under the old definition.
-DH was laid off.
-If the jumbo limit is changed hoping we can refinance but not sure with DH being underemployed at the moment. Initial calls to Citi were not promising. They basically suggested that we'd have to start missing payments before they considered a refinance for us!
Posted by: verysleepy at January 16, 2009 12:15 PM
I'm purchasing a co-op right now and just got approval at a great rate.
The person at the bank I'm dealing with said they are getting so many people looking to refinance. Given there are only so many hours in a day, they are concentrating on new home buying loans first, then refi's.
Posted by: Flatbushrising at January 16, 2009 12:20 PM
I was told a two family is always more than a family and was quoted a rate of 5.75%. Is the rate of 4.875% for a two family? What about closing costs? Only asking because we were told they would be quite high from two different banks.
Posted by: czar at January 16, 2009 12:33 PM
I believe that the conforming limit went up as of Jan. 1 in high-price areas (I was told 725k for 11238), but this class is still treated by banks as "jumbo conforming" and rates won't be as low as for conforming mortgages below the FNMA limit of 417k. Sadly (for me at least) the change does not affect coops and 417k remains the threshold. I am thinking about refinancing with a conforming loan at that amount and taking a home equity loan for $50,000 or something since rates are getting really low.
Posted by: MsBrooklyn at January 16, 2009 12:34 PM
MacD, HSBC is offering a Community Works rate of 4.6% as of last week. You need to qualify by income or area but Bed Stuy should qualify you regardless of your income.
Posted by: housebywe at January 16, 2009 1:18 PM
so with all these rates dropping, why the hell aren't the banks opening up to lend more so people can afford to buy again. where are the buyers (or are they just being pickier) and if they are so busy with new loans vs refinancing, where are all these buyers who are buying? doesn't add up
Posted by: oohlala at January 16, 2009 2:54 PM
Thanks housebywe - HSBC's program is for refi? I thought the Community Works rate was for new purchases. Certainly worth looking into.
Posted by: MacD at January 16, 2009 3:12 PM
Thanks, Brownstonerlogin.
One reason a lot of people aren't jumping in may be that they don't have 20% in equity if they bought recently with 10% down and the appraised value has gone down. To do so, you'd have to put in a lot of cash to get up to the 20% line, which probably makes no sense when values could continue to plummet.
Posted by: Park Sloper at January 16, 2009 3:14 PM
i just got on the phone with my mortgage broker and they said the best they are doing is 5.25% or maybe 5.125%. does anyone have any suggestions of who to call for under 5%? we want to pay down to the conforming limit and get a new 30 yr fixed.
Posted by: wine lover at January 16, 2009 3:27 PM
Smaller, local banks seem to be offering better rates at the moment. Try Astoria Federal, HSBC and Sovereign, and there are others out there too. If you are a member of a credit union, they can offer very competitive rates as well. Also, I found the brokers at Trachtman and Bach to be extremely helpful even though I ended up locking in directly with a bank.
Sovereign is also offering those "Community Works" aka CRA loans, which can definitely be used for a refi. There are "moderate income" requirements, but this is NYC so "moderate" would be high-end almost anywhere else.
Also, closing costs are a lot higher if you go to a different bank instead of refinancing w/ your current bank, even if you're doing an assignment. I was told that it's not worth doing for less than a full percentage point difference. For us, the difference between the new bank's rate and the best offer from our old bank (Citi) still makes it worthwhile.
Brownstoner, with that 4.875 rate, were you also quoted a point for a 2-family building? From what I've been told, for a 2-family, the conforming limit is higher (533, 850 on Dec. 30, though from what you posted, apparently that's now changed), but there is also anywhere from a quarter-point to a point added if it's 2-family or up.
Posted by: petunia at January 16, 2009 3:54 PM
oh, and for czar: our mtge is for a two-family and we were quoted the same rates (5% or below) as for a 1-family, the difference was all in the points.
Posted by: petunia at January 16, 2009 4:02 PM
thanks petunia
Posted by: wine lover at January 16, 2009 4:29 PM
You can find the conforming loan limits by county at http://www.ofheo.gov/media/cll/FullCountyLoanLimitList2009.xls. Breaks it out per product type.
Posted by: bhabe at January 16, 2009 4:42 PM
http://www.ofheo.gov/media/cll/FullCountyLoanLimitList2009.xls
apologies, the period at the end was breaking the link
Posted by: bhabe at January 16, 2009 4:48 PM
Thank you!
Posted by: czar at January 16, 2009 5:41 PM
we're currently at 6.125%
taking our 520k mortgage down to 5.25% with current lender
(wells fargo) through a refi
we've got about 700k in equity and over 800 fico scores
this too is a "jumbo conforming" rate
we would have been below 5% if the loan was under 417k
so even though we're below official jumbo level (which is at 625k or 729k right now, i think, can't remember which) we still get dinged for being over 417k
Posted by: ronvalron at January 16, 2009 6:14 PM
Don't know what the conforming loan limits are right now, but there is a schedule for 1, 2, 3 and 4 families, with progressively higher loan limits. There is no difference in rate based on the number of families, if the loan is within the limits, it's conforming. The current temporary rates are something else, and I don't know how they work. Rates and requirements can always be higher based on loan to value ratio and the borrower's credit score.
Posted by: raphael9 at January 16, 2009 6:18 PM
Our broker quoted us 6.5 percent for a mortgage including a construction loan (203K) at $505K total. Possibly this sucks, but just throwing it out there.
Posted by: mopar at January 16, 2009 11:49 PM
For the 5 boroughs, the 2009 agency conforming limits are as follows (and subject to change in 2010):
1 unit - $625,500
2 units - $800,775
3 units - $967,950
4 units - $1,202,925
The regular conforming limits still apply as follows:
1 unit - $417,000
2 units - $533,850
3 units - $645,300
4 units - $801,950
Currently, the 2009 agency limits are allowed only on 1 unit homes for conventional Fannie and Freddie loans (although this it may apply to 2-4 family homes soon).
However, the 2009 limits are allowed for FHA financing for all types (1-4 family).
Anything above the 2009 agency conforming limits are considered jumbo or non-conforming.
Hope this helps.
sunny_hong@countrywide.com
Posted by: shong1 at January 18, 2009 7:22 PM
Like MacD, I was thinking about refinancing, too. By way of background, I secured a CommunityWorks jumbo loan in mid-2007 for a condo in Clinton Hill at a rate of 5.75%. I also took another loan (NOT a mortgage, and therefore non tax-deductible, sadly) to make up the balance of the purchase price, at a somewhat higher interest rate.
My questions are two-fold: first, can I take advantage of the current new rate of 4.6%, or is CommunityWorks for first purchases only and not refinancing? Second, if I CAN use CommunityWorks for refinancing, would it be posisble to roll-in the cost of my second, higher-inerest loan into my mortgage, since the jumbo threshold was been revised upward?
Thanks for any advice.
Posted by: nellymikhaiel at January 20, 2009 2:09 PM
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