Good morning! I've been asked by quite a few people recently about jumbo loans. Obviously in most parts of the nation, the conforming loan limit is $417,000. Then there is the jumbo conforming loan limit which varies by county. In my county (King) the limit has been raised to $567,500 as of April 6. The interest rate is higher though, roughly by 1/2%.
So what about loan limits above the jumbo conforming barrier? There are options. Number one, most super jumbos (above jumbo conforming limit) are best priced on an ARM (fixed for the first 1,3,5,7, or 10 years then adjust). If you have a loan for say 1 million this might be your best bet. The reason why is that 30 year fixed jumbo mortgages are still pretty expensive. Think rates of probably above 7%. Contrast that with super jumbo ARM rates as low as 4.5% and you can see that it might make more sense to secure this type of loan.
As with anything, loans are still being heavily scrutinized. Expect to only be able to borrow up to 70% loan-to-value in most cases. Also, credit scores need to be above 700 and there need to be assets and income to support the loan. It 's extremely important to work with a seasoned loan officer who knows how to get a loan like this done. Alot of times our customer is sharp and needs to know they're working with a trusted professional. Feel free to comment on this if you like. What are you seeing? I'm seeing a return to the jumbo market by lenders. This is an encouraging sign! Take care.
Paul McFadden
Paul- Earlier this year I had a loan go sour. A VA jumbo. The lender would not underwrite anything over $417,000 even though the buyers were approved with automated underwriting. The collateral was there, they just said they wouldn't do it. The buyers were putting the 25% down on the overage too.
Paul, Thanks for giving a market update on jumbos. I was wondering the status. By taking care of today, we see some promising signs.
Dear Paul,
Thanks for the update and your suggestions. I have never had a client use a jumbo loan.
Now I can sound more intelligent, if questioned.
Barbara
Barbara: you're very welcome! Have a great day!
Kate: I'm glad I could be of service. I wish you well this year!
Mark: Sorry to hear about that. Yes, VA is a totally different animal. It has to fit in the box.
Sounds like the old days. It will be nice when balance comes back to the market for those in markets where Jumbos are the majority, not the minority.
Kate: I'm hopeful too. We've got a ways to go but we're on the right track.