There has been a product missing from the mortgage market for the past couple of years. That product is a jumbo, fixed rate loan. Jumbo loans are any loan that is above 417K. The reason these are called Jumbo loans is because they exceed Fannie Mae and Freddie Mac's loan limit for insurance.
That means that these loans are purchased on the secondary market by private firms, pension funds, hedge funds, etc. At the start of the housing/mortgage debacle this loan was one of the first to disappear. The lenders that remained in this market had to fund with their own money, and keep the loan on the books and service it. This meant two things: tight underwriting guidelines and higher rates.
Over the last month these Jumbo loans have been appearing on rate sheets with more frequency. A lot of the lenders that exited this niche market are now back in it. Rates are still slightly higher than conventional loans (always have been, but the spread is starting to narrow) and you will need 20% down. There are now also second lien options up to 200K to make the purchase process and resulting loan a little more palatable.
Bottom line, you or your clients now have more options for their large purchases. Please call us for current rates and program guidelines.
As far as current conventional rates are concerned, where we go remains any one's guess. Like a see-saw on a playground we are up then down up then down...rely on your mortgage professional to ride the waves and lock you in a trough rather than a peak.
Adam Simmons
Crystal Clear Mortgage
888-834-6911
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