05 Jan 09 Jumb Mortgage Rates Still Too High
The number of people applying for mortgage loans has been increasing in the recent years. The high interest rates are particularly an issue in Greater Boston, where expensive housing forces many people into jumbo-loan territory, which is currently $465,750 and above. In 2006, more than 10 percent of borrowers in Massachusetts took out jumbo mortgages. Homeowners in high cost states like California, Connecticut, Maryland, Massachusetts, New Jersey and New York have been complaining for years about the mortgage injustice that goes along with paying higher interest rates for jumbo mortgages.
Borrowers with conventional home loans which are at or below $417,000 have been seeing mortgage rates as low as 5 percent, while the national average for a jumbo loan hovers around 7 percent. There is a new, third category of mortgages between jumbo and conventional loans, created last year by Congress, called conforming jumbos, which now average about 5.6 percent, according to a provider of industry data, HSH Associates. “I think it is crazy you can’t get as good a rate,” said Julia Blake, 36, who with her husband is looking to refinance the Cape they bought in Wellesley for $695,000 in 2007. “To me, a jumbo mortgage should be a luxury house, and in Wellesley it is not. You can’t get anything less than $600,000.”
Another Wellesley resident, Paul Barnhill, wants to refinance his jumbo ARM into a fixed-rate loan, but not at current mortgage rates. “I would refinance in a heartbeat if I could get 5 percent,” said Barnhill, 44. Jumbo mortgage rates are higher because lenders who initiate the loans are having trouble selling them on the secondary market, where the resale of mortgages provides funds for new loans.
Jumbo Mortgage Rates Hinder Home Sales Price with More Equity and Higher Credti Scores Required!
httpv://www.youtube.com/watch?v=iG5vVw1rWZk
The banks and investment groups that buy mortgages are reeling from the credit crisis and the subprime mortgage debacle, and are steering clear of any home mortgage that smack of higher risk. The major players on the secondary market, government-sponsored Fannie Mae and Freddie Mac, do not purchase jumbo loans. Read the complete article >.
Tags: current mortgage rates, jumbo home mortgages, jumbo mortgage loans, jumbo mortgage rates, subprime mortgage debacle
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