Jumbo rates used to be much higher than the non-jumbo. Back in 2009, they were running about 2.5 percent higher than conforming rates. A jumbo mortgage is anything over a $417,000 loan amount. However, in some areas, the jumbos start at anything over $625,500.

Those are called “high cost loans” or “high balance” so you can still get a conforming (or pretty close to conforming) rate on those loan amounts between the $417,000 and $625,500. But it is only for certain areas of the country. You can see those areas by clicking here.

Note: Read Our Top Five Mortgage Complaints!

Making a Comeback

Jumbos are making a comeback. And the rates are close to a non jumbo! It used to be that way until the meltdown and they got as high as 2.5% more back in 2009 when I checked. The jumbo market was hit hard obviously. When lenders a skittish about lending on $250,000 loan amount, they sure as heck aren’t jazzed up about lending on an $800,000 (or more) loan.

But in a recent article in Reuters, “Mortgage market leader Wells Fargo has increased its jumbo loan volume for three years straight, said Greg Gwizdz, an executive vice-president. In 2010, Wells Fargo issued a total of $10 billion in jumbo loans. That rose to $27 billion in 2011 and to $41 billion in 2012, with the average loan at $1 million, Gwizdz said.” You can read out review on Wells by clicking here.

It also goes on to say the rates are close to non jumbos due to the quality of the borrowers. I remember back before the meltdown, there were several loan programs that catered toward the jumbo client. Because the clients had stellar credit, assets, and income, they were given kind of a cursory glance by the underwriting guidelines for an approval.

But just because the jumbos are making a comeback doesn’t mean that part of it is back. The underwriting guidelines are stringent and you will have to produce the documentation on every nook and crack of your financial picture.

Rate Comparison

I took a look at a wholesale lender’s price sheet. I don’t know if this particular lender does a decent jumbo business but I wanted to see if what they said in the article was what this lender reflects.

Also in the article, a person said they got a jumbo for 3.5%. So, this lender did have rates in that range for an adjustable rate or ARM loan. The fixed jumbo rate was more like 4.25%. And I also checked the high balance loans compared to the conforming and the rates for the high balance were just slightly higher which is pretty normal.

Good Luck!


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