Jumbo Mortgages: How You Lookin'?
According to an article in today’s Wall Street Journal, the average rate for a fixed rate jumbo mortgage (over $729,500) is currently 7.91%, versus 6.6% for smaller “conforming” loans that are backed by the government; the federal legislation that raised the conforming ceiling to $729,500 back in March is scheduled to expire at the end…
According to an article in today’s Wall Street Journal, the average rate for a fixed rate jumbo mortgage (over $729,500) is currently 7.91%, versus 6.6% for smaller “conforming” loans that are backed by the government; the federal legislation that raised the conforming ceiling to $729,500 back in March is scheduled to expire at the end of the year, and a Real Deal article last week noted that both Chase and Wells Fargo were moving up that date to December 1. What are readers that have been in the market for a mortgage hearing from their mortgage brokers? Any mortgage brokers out there care to chime in directly?
No Quick Fix for Housing Prices [WSJ]
Currently here at Kazmi National Fiannce we’re rolling out a niche product for the entire state of NJ and only certain Counties in NY…NYC, Bronx, Queens, Richmond, Kings, Suffolk, Westchester, Orange, Putnam and Rockland Counties only.
We can do loans up to $2.5 million even on c/o refi’s up to 70% LTV. I just priced out a loan at 6.875% 30yr fixed on a cash out refi for a gentleman with a 758 middle fico, 40% debt ratio, over $200k in liquid assetsm 55%LTV. On purchases, we can go to 90%CLTV with a buyer’s held 2nd with a combined loan amount no more than $750k. Obviously you have to meet certain criteria to qualify but if you would like more info on this product you can email me at nvalenti@knational.com I will be more than happy to forward you the information.
I agree with Adam that there are many products out there and some have great rates and other may be higher, but they are all risk based. There is a reason why some banks are in better positions than others. The new permanent conforming rates we should we should be able to write in the very near future. Home equity rates now that the Fed has lowered rates again is a great option to avoid the Jumbo mark. With the new conforming limits and the great Heloc rates it is a good time to borrower money…
to parksloper,
while you may be correct in worrying about your value of your home,
the one other option you may have, which is just an option but not the best is to have the original lender take a lesser payemtn to satisfy the mortgage, now again im going to say its not the best option but an option never the less, these days rates are extremely unpredictable like big time, and alot of changes are colming in 2009, so beware of what you hear and see, but know that if you do decide to refinance your home its still doable with the right lender.
if you have any questions just pm me and ill explain more.
Note to park sloper: to answer the question you asked regarding your appraisal coming in low – should that happen, you would only be approved for a loan amount that would be 75 to 80% of the appraised value (depending on the lenders guidelines you are working with). If that works with the loan amount you are trying to refinance, you’re good to go. If it doesn’t you have two options: 1- pay the difference between old and new loan at closing and walk away with a new (30 year fixed?) loan; or 2- walk away with your old loan and continue to monitor property values that will impact your property’s appraised value.
To gkw – the temporary increase in conforming loan amounts is set to expire 12/31/08, but since all those loan amounts between $417,000 and $729,750 must be closed and delivered to Fannie/Freddie by that date – lenders are shutting off the faucet with borrowers to give them enough time to turn around and sell the new mortgages.
Separate from that – the conforming loan limit has been permanently increased as of 1/1/09. This also includes FHA loan limits. FHA will increase the minimum downpayment from 3% to 3.5% as of 1/1/09.
Most important points- watch your credit score and watch your income – to – debt ratio. No flexibility there.
Hope this all helps.
park sloper – that’s a difficult position. Very tricky but my sense is that most people are predicting big rate jumps because of inflation which would point to refinancing as soon as possible. Adam Dahill – I thought the whole point is that they already raised the conforming limit and it’s going back down at the end of the year. Maybe they can’t extend it because of the sad state of Fannie and Freddie.
Well, The are pulling back the conforming jumbo product by the end of this year but there are other products out there at attractive rates, you just need to know where to look. We have spent the past year and half developing relationships with small community banks that portfolio their mortgages and are not subject to Fannie/Freddie. You would be surprised how competitive theses products are. Also, The gov. is going to raise the standard conforming limit to 625k from 417k. We also might see some other news in the coming months. I would stay tuned.
One thing that you will see is a return to fees being charged upfront as institutions are making it more difficult to upsell the rate to build in margins on these jumbo products.
To the poster that has 2 years left on an ARM- you may want to look to switch to a fixed now even though you have 2 years left. Who knows where rates will be and if you will meet the criteria.
DOW sometimes you write intelligently and then there was that!!!!
“Someone please explain.”
Contrary to it’s title, the bailout is nothing more than protection money. We were successfully extorted by foreign countries who hold our bad debt that THEY, THEYYYYYYY, had placed bets on. It can be implied that we were threatened with economic warfare. Deception (the “bailout”) works every time.
Here’s another question I hope someone can answer. Let’s say I decide to refinance my mortgage before the end of the year to take advantage of the jumbo conforming legislation. And then let’s say that, when the bank has my home appraised, it turns out that the value has fallen below the amount I have mortgaged (given that I only put 10% down, this may be a distinct possibility). What happens? Will I still be eligible for a mortgage in the same amount? Or do I risk somehow owing the bank money, because they will only extend me a mortgage for less than I currently owe them?
I have a five-year ARM that will re-set in January 2010, so I can wait … but then the amount I’ll need to refinance (if I want to try to get a fixed rate at that time to avoid any huge jumps in the adjustable rate at that time) will definitely be above the conforming ceiling unless the current legislation is extended.
What to do?