News

04/07/2010 - Jumbo Mortgages Return.

After the mortgage industry meltdown of 2008-2009 which saw the elimination of any non-conforming Jumbo Loans, they are now returning for purchases and refinancing! 

A little background, Fannie Mae and Freddie Mac establish guidelines under which they will buy loans from lenders.  This enables lenders to make mortgage loans with reduced risk, since they can sell them to another party and replenish their funds.  Loans that conform to Fannie Mae guidelines are called, you guessed it, conforming loans.  Non-conforming loans are loans that do not conform to these guidelines, this is why Jumbo loans are sometimes call non-conforming loans. 

Recognizing the impact on the housing market, Fannie Mae and Freddie Mac introduced High Balance Loan Limits for expensive areas.  This allowed lenders to provide mortgages for high cost areas with lower risk.
 
As the economy is improving and investors are more willing to take risks by investing in Jumbo Loans, mortgage lenders are re-introducing these to the market.  Rates are typically close to 1% higher than conforming loan rates, as the risk is higher for these loans.  This may change over time, up or down, based on the market.  Overall it's a great sign that the mortgage market is returning, which will support a healthy housing market.
 
Do you have a mortgage over $417,000?  Ask us to provide a custom rate quote for your situation.

Or you can always call us toll-free at 877.523.3886 and ask to speak with a loan specialist.