Don’t believe everything you hear or think for that matter….the media has been spreading rumors that Jumbo mortgages (those over the conforming loan limit of $417,000) are either not available or are very difficult to qualify for and only offered with very high interest rates.
Neither of these things are true. It is however, true that in the current mortgage environment if you are working with a “mortgage broker” or even a “correspondent lender” in all likelihood you will be quoted a relatively high interest rate and will be advised that you need very high credit scores and a huge down payment. On the contrary if you go to a national bank you will find that very little has changed in the way of credit and down payment requirements and interest rates remain near historic lows. The graph below illustrates 30 year fixed rates on conforming mortgages since 1974 and as you can see we are currently in a very attractive interest rate environment so you can and will get a great rate on your mortgage, provided you are working with the right professionals. Some of you may recall this chart from my previous post “Why Prime Rate Is Not Going Down” and I will refer to it again in the future as it helps us keep things in perspective.
For more on why currently banks can deliver what brokers and correspondent lenders can’t see the attached article Liquidity Crisis – How It May Effect You .
Current interest rates on 30 year fixed rate jumbo mortgages for well qualified buyers remain in the low 7% range with no points. So how do you ensure that you are working with the right bank or lender? Here are 3 things to keep in mind.
- Make sure you are working with someone affiliated with or employed by a National Bank, go with the names you recognize.
- Keep in mind that while interest rate is important it is not the most important thing about a mortgage. Even the lowest rate on the wrong loan program or loan structure can cost you many thousands of dollars.
- The mortgage landscape is changing daily so make sure the loan officer you are working with is keeping abreast of the most recent developments….ask questions and be informed.
James R. Venney, CMPS
