'Jumbo' Mortgages Still Costly - And Harder to Get

Is $729,750 still in play, I thought it was lowered to $625,500

For the record, I did NOT start this thread.

It was raised again.

Thinking about making an offer on a coop. In speaking with my broker, anything lower than $625K mortgage you can get a good rate for, anything above, you start paying a lot higher fees. The broker also said that many banks are still not offering jumbo loans. And if they do, they are at significantly higher rates.

Im not sure why theres so much talk about jumbo rates being so hard to find. I know we have been making efforts in writing more jumbo mortgages for credit worth customers. And rates are historically at lows for jumbos. I even compared it to 1 year and 2 years ago and rates now are lower. Sure some requirements tightened but certainly for the better. There is a min. 20% down up to 1.5M as opposed to 90% financing for jumbos that were available years ago. There was even an article out about how Bank of America is looking to increase jumbo lending. Rates are very volatile so timing is key. There have been times this year you can get a jumbo above 625,500 in the high 5% range for a 30 year fixed. Sure, not as low as conforming rates but we're talking jumbo here.
Speaking of 625,500. It is still 625,500 today for the high balance conforming loans. And up to 417k on conforming. It was announced that the 625,500 will be increased to 729,750 but it has not happened for conventional loans yet. Although it did for FHA.
sunny_hong@countrywide.com

"There was even an article out about how Bank of America is looking to increase jumbo lending"

Don't hold your breath on that. The Obama administration and the Pelosi crowd think that anybody who has a jumbo mortgage lives in a mcmansion. They aren't going to do anything to help these "rich" people out.

Here's evidence...

http://www.nbcwashington.com/news/business/_Jumbo__Mortgages_Still_Costly_-_And_Harder_to_Get.html

http://www.marketwatch.com/news/story/Moodys-increases-loss-projections-jumbo/story.aspx?guid=%7BA88EABB2-E878-4678-8968-F13C9298B1DC%7D

http://online.wsj.com/article/BT-CO-20090323-711512.html

I have a 30 year fixed jumbo from countrywide that is getting processed at 5 7/8% We locked almost two months ago. I had hoped that rates would come down even lower with all the work the fed etc are doing on the credit markets, but doesn't seem to be the case. Has anyone seen jumbos recently at lower than that?

It all depends on whether it's a conforming jumbo or a nonconforming jumbo.

Why is it taking so long to increase conforming loans to 729750? The administration has to belabor every program with half steps and then additional changes.

I was offered 4 5/8 on a 5/1 arm yesterday. But with that basis, I'd rather grab a 30yr fixed. Problem is, the lender isn't offering that. So -- what happens after 5 years?

Luis, it's taking so long because the GSE's are still trying to figure out how to price these news loans correctly.

stevejhx - i am pure jumbo not jumbo conforming. anyone seeing anything better than 5 7/8 for a 30 year?

what about co-ops with 25% down? what rate are people seeing?

As usual the media has convinced the public that their only options are the big banks. Portfolio lenders continue to thrive in this enviorment. They are not tied to the government/fan/fred and their ridiculous $625,500 number. Thats great if I want a one bedroom here or a home on Long Island. Portfolio lenders sweet spot is anything above the $625K number and usually up to $3.5m all though most of them will go higher if the deal is strong. They require strong credit, income and reserves. They will not typically go over 80% LTV and like to be closer to 70-75LTV.

Rates can go as low as 4.75% on a 5/1 ARM, 5.125% on a 7/1 ARM. I only know of one portfolio lender that will do 30yr Fixed but that rates are ridiculous and not in a good way.

mcohen@panamloans.com

K2- If you are concerned about the 5 year adjustment you can take a 7/1 or a 10/1. The rate will be higher but certainly give you some more security. All depends on your situation

Coopbuyer- what is your loan amount. Some portfolio lenders raise their rates as the loan amount goes up and others will only lend at a certain LTV based on the loan amount.

it would be around 750K loan amount with 25% down-- im hearing 6.25 for a 7/1 for a co-op-- is that too high?

COOPBUYER- That seems a little high, are you going through a bank or a broker?

if you can borrow at 620K, then you can get a better rate. we are getting 5.5%.

Sounds high but depends on your exact situation as a buyer. If you have strong reserves (approx $75K)after the down payment I can get 5.125% with 0pts on a 7/1 or 5.875 on a 10/1.

Agreed with shong and MM787, there is a lot of talk about elusive jumbo financing but I found that not to be the case. Look to the portfolio lenders or brokers with good relationships with those lenders. Just don't talk about 7/1 and 10/1 ARM's on this site. stevejhx thinks they are too risky and that everyone should have a 30 yr fixed regardless of the cost. I guess it is the only way he can get his boiler plate little formulas to tie out.

my broker is telling me 6.25 on a 7/1 w/25% down on a co-op. weird. any chance that the 729750 limit will eventually apply to co-ops??

In speaking with mortgage brokers at a big bank and at a brokerage firm, jumbo financing is not hard to get, just difficult to qualify for--epecially it seems at the big banks. I was told by one bank that if I put 35% or 40% down, I could get a really good rate (high 4's, low 5s). And 30% seems to be the minimum down payment that banks want in general to get a decent rate (mid 5's) according to the mortgage broker firm rep. And this is with a 760+ credit score.

Coop Buyer - I have been asking about Jumbo Coops at the $729K number for what seems like 6months. The truth is that coops are very rare in 99.9% of the country and I dont think any politicians are running to make sure coops are included in any of this. I could be wrong but thats my opinion. If you have ($75K) reserves and a 700+ score you should not be paying 6.25% on an 5/1 ARM

Lincoln, thats the difference between working with bankers and brokers who know vs. people who either dont know what they are doing or are tied into banks they work for or banks they only have relationships with. Also sounds like the guy you spoke to is telling you that if you put down 40% he can get you a good rate. All he is doing is telling you if you put down enought $ he can get you a Jumbo Conf loan.

coopbuyer1 - 6.25% on a 7/1 ARM at 75% LTV sounds a little high even if the loan amount goes up to 1.5M our rates are lower. As a matter of fact, that more comparable to our 30 year fixed jumbos today. Currently, the jumbo conforming for coops are only up to 625,500. Hopefully the 729,750 will go into effect soon.

I'm currently considering a 5/1 ARM for north of $1mm with 30% down at 5.375% with 1/8 of a point to pay. Sound reasonable?

what about 20% down with loan of 490k? I assume that's a conforming jumbo

"I'm currently considering a 5/1 ARM for north of $1mm with 30% down at 5.375% with 1/8 of a point to pay. Sound reasonable?"

If you have a credit score of 700+, than I would say 5.375% rate stinks. You sould be able to score 4.75 for a 5/1 with 30% down. No points.

juiceman it depends on post closing reserves and other factors also. Most portfolio lenders dont allow assignments if you want to refi later from what I hear. But either way, smallmj, you can probably do better than 5.375% with .125 pts.

"Most portfolio lenders dont allow assignments if you want to refi later from what I hear."

Ineresing point shong, I've asked that question and was told differently. Of course I can't get anything in writing......

Thanks. This is a refi so would the advice be to jump on a rate if I can get one south of 5% or does anyone feel that rates are continuing downwards. We Quantitative Easing would seem to suggest Treasury Rates will increase but that the spread on Jumbos remains high so it depends on whether spreads close faster than Treasury rates increase.

Either way, 5% seems like a very attractive rate.