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Jumbo mortgages cheaper than other mortgages


 

WASHINGTON – Nov. 14, 2013 – In an unusual move, jumbo mortgages are becoming a bigger bargain over conforming loans.

Lenders are offering jumbo mortgages at lower rates – more than a quarter of a percentage point – than conforming loans backed by Fannie Mae and Freddie Mac.

“The government-run agencies require conforming loans to be below $417,000, unless they are for homes in high-cost areas like New York or Los Angeles, where the limit is $625,500,” CNNMoney reports.

Generally, banks charge higher rates on jumbo mortgages, typically about a quarter of a percentage point more than conforming loans, according to the Mortgage Bankers Association. But recently that has reversed.

For example, Wells Fargo is offering a 30-year jumbo mortgage rate this week at 4.125 percent. In comparison, it’s offering a 30-year fixed-rate conforming mortgage at 4.5 percent. US Bank is offering a jumbo mortgage rate for 3.875 percent compared with 4.25 percent for a conforming loan.

“Never in my memory have jumbos been such a bargain,” says Peter Grabel, a loan officer at Luxury Mortgage Corp. in Stamford, Ct..

Source: “Rich people are getting mortgages cheaper than you,” CNNMoney (Nov. 12, 2013)

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Related Topics: Mortgages