Jumbo Mortgage | Mortgage Rates & Trends: Mortgage Blog

Mortgage Rates & Trends: Mortgage Blog

Jumbo Mortgage Rates, Stock Values Boost Sales Of Luxury Homes
By Michael Kling on March 7, 2011

At least one housing market saw a huge jump in home sales last year: high-end homes.

For instances, sales of California homes over $1 million increased from 18,621 in 2009 to 22,529 in 2010, a 21 percent, reported DataQuick Information Systems, a San Diego-based data provider. In fact, sales of homes and condominiums for over $1 million increased in all 20 major metro areas last year, reported DataQuick. Those metro areas saw an 18.6 percent increase in high-end home sales on average.

Low mortgage rates helped boost the increase in luxury home sales, but a rebounding stock market and lower home prices were major factors. Buying a million dollar home calls for a jumbo mortgage, which entails a higher mortgage rate and stricter lending guidelines like a higher down payment. Although many luxury home buyers use cash, lower mortgage rates helped motivate them to purchase homes. The difference, or spread, between jumbo mortgage rates and rates for smaller conforming mortgages has narrowed considerable since the height of the financial crises.

But the wealthy worry less about mortgage rates than other home buyers, said DataQuick President John Walsh. Continue Reading…

Category: Jumbo Mortgage
BlackRock Fund Brings Hope For Jumbo Mortgage Borrowers
By Michael Kling on February 28, 2011

News that the world’s largest money manager is dedicating $1 billion to purchase jumbo mortgages is encouraging hopes that the private mortgage industry will recover.

A return of private investors could help hold down jumbo mortgage rates and ease jumbo mortgage terms, making it easier for borrowers to qualify. It would also help fill the mortgage void if the government’s decreases its role in home loan lending.

BlackRock Inc., the world’s largest asset management firm with $3.3 trillion under its direct control, is creating a $1 billion BlackRock Mortgage Investors Fund to purchase residential mortgages that are too large to meet government guidelines, or nonconforming loans, from lenders, according to Reuters, which first reported about the fund. The mortgages would be prime loans, or to borrowers with good credit and adequate home equity.

The news implies that BlackRock CEO Larry Fink, who Vanity Fair called “possibly the most important man in finance today,” is confident about recovery of the housing market. His company has a market capitalization of about $40 billion and directly controls or oversees about $12 trillion.

The fund also gives hope to the Obama administration’s proposals to begin shrinking Fannie Mae and Freddie Mac, the giant mortgage investors run by the government. BlackRock hopes to be ready to help take up the slack if the government starts withdrawing from the home loan business. After financial crisis hit, the private mortgage industry practically shut down, and Fannie Mae, Freddie Mac and the FHA have dominated mortgage lending with government-backed or government-owned home loans. The Obama administration has put forth proposals to shrink and eventually close down Fannie Mae and Freddie Mac. Continue Reading…

Category: Jumbo Mortgage
Congress Extends Conforming Loan Limits
By Michael Kling on October 1, 2010

A luxury home like this might need a jumbo mortgage and could benefit from a higher conforming loan limit.

Congress has voted to extend the higher conforming loan limits for jumbo mortgages through Sept. 30, 2011.

President Obama, who supports extending the conforming loan limit, is expected to sign the measure soon.

The conforming loan limit will still be able to go as high as $729, 750 in high cost areas, which include densely populated areas around major cities like New York, Washington D.C., San Francisco and Los Angeles. Anything over that amount will be considered a nonconforming loan, or a jumbo mortgage, and face higher mortgage interest rates. Check conforming loan limits.

If Congress had not acted, the conforming loan limit in high cost areas would have retreated to $625,500 after Dec. 31, 2010. In most areas, home loan amounts over $417,000 are considered jumbo mortgages.

Applies to FHA Loan Limits

The extension also applies to loan limits for FHA insured loans.

Proponents of the conforming loan limit extension argue that housing markets would falter, even collapse, without the higher limits. Opponents of government involvement are probably grinding their teeth. Those against the extension say fears of the sky falling are overblown. The government should try to get out of the mortgage business and let private markets return.

Government involvement in housing finance has caused huge losses to taxpayers and is not necessary to achieve the benefits claimed by its proponents, argues Peter J. Wallison, a scholar for the American Enterprise Institute. Instead of trying to find ways that the government can stay involved in housing finance, he says, the new Congress should consider how to withdraw the government from any role in financing prime mortgages and put private-financing mechanisms into place.

Nonconforming mortgage rates are higher because investors see them as riskier since they are not purchased or guaranteed by Fannie Mae or Freddie Mac.

While the impact on housing markets is not certain. Many Congressmen probably didn’t want to take any chances.

Realtors Are Happy

The National Association of Realtors and California Association of Realtors were happy about the conforming loan limit extension.

“Without the extension of the higher loan limits, many California borrowers would have a harder time refinancing homes and obtaining financing for new home purchases,” said CAR President Steve Goddard.

Mortgage lenders, as well as borrowers, also like higher conforming loan limits.

“Extending the existing limits is essential to helping borrowers continue to have access to affordable long-term, fixed-rate mortgage credit in today’s struggling economy,” said Robert E. Story, Mortgage Bankers Association chairman. “The current limits have been a key component of keeping the mortgage market functioning, helping keep mortgage interest rates low for consumers who want to purchase a home or refinance an existing mortgage.”

Category: FHA, Jumbo Mortgage, Mortgage Interest Rates, Mortgage Rate Trends and Analysis, Mortgage Rates
Higher Jumbo Loan Limits Expected To Expire
By Michael Kling on September 24, 2010

Higher jumbo mortgage limits are set to expire at the end of this year, which will mean probably higher jumbo interest rates for larger mortgages.

The government temporarily increased the conforming loan limit in so called “high cost” areas as part of the Economic Stimulus Package of 2008. While the limit was usually $417,000, it can be up to

Jumbo mortgage interest rates might rise for houses like these.

$729,750 or 125 percent of the median home value of the metropolitan area under the act. Because Fannie Mae and Freddie Mac cannot purchase or guarantee loans over the conforming limit, larger mortgages, called jumbo loans, carry higher interest rates.

The temporary conforming loan limit also applies to mortgages insured by the Federal Housing Administration.

Some Congressmen, saying home prices would collapse without the government guarantee for those jumbo mortgages, are supporting a bill that would make the higher conforming loan limit permanent, but its passage is far from certain. Many experts say the government should ease itself out of jumbo mortgages and let private investors return.

With Republicans poised to take control of Congress, or at least have more control, extending the conforming loan limit could be difficult. Unless Congress acts, the jumbo loan limit will return to $625,500 in high cost areas.

That means jumbo mortgage borrowers should act soon to get lower mortgage rates if they’re considering a mortgage refinance or home purchase. Jumbo mortgage interest rates for a 30-year mortgage could be about 0.8 percent higher than a conventional mortgage.

“Allowing the current loan limits to fall would be disastrous to California,” said Congressman Brad Sherman (D-CA), who has introduced a bill to make the conforming loan limit increases permanent.

“Passage of this legislation would make mortgage financing more affordable in the San Fernando Valley and in other high cost areas throughout the United States,” Sherman said. “Increasing the availability of such affordable mortgage financing is critical to helping to stabilize the housing market and to returning Fannie, Freddie and the FHA to relevance in California.”

“While lower priced home sales have increased in recent months, sales in the higher priced ranges have not seen as much movement because of higher interest rates on jumbo loans,” agreed Congressman Gary G. Miller (R-CA) Miller, who introduced the bill with Sherman. “Buyers in high cost areas, such as Southern California, are at an extreme disadvantage simply because of where they choose to work and live.”

Plenty of pundits disagree about the conforming loan limit. “Government involvement in housing finance is an invitation to disaster,” writes Peter J. Waillison, a scholar at the American Enterprise Institute, in an opinion column for Bloomberg. “As illustrated by the S&Ls and GSEs, no matter how such a system is structured, government support will hide the real risks.”

If you have jumbo mortgage loan and thinking about refinancing, it may be prudent to do it now before the loan limits rise. Call one of our expert mortgage loan officers today.

Category: Jumbo Mortgage
Refinancing to Decline 50% in 2011?
By Michael Kraus on September 20, 2010

Have you ever wondered how constant exposure to negative news shapes your own outlook on things? I do, because all I seem to read lately is bad news. Some days I feel like the kid from A Clockwork Orange. Here’s some news that would be particularly bad for the mortgage industry: the Mortgage Bankers Association (MBA) is forecasting a sharp drop in refinance activity next year.

A new report from the Mortgage Bankers Association via Housingwire predicts that refinancings could decline by 50 percent in 2011. Currently refinancing accounts for around 80 percent of all mortgage-related activity and has been keeping many mortgage companies afloat. Home purchases are down sharply over the past two years, as very low mortgage rates have not convinced potential buyers to make the leap into homeownership. The lack of demand can be attributed to the expiration of the first time homebuyer tax credit, continued high unemployment, and generally poor economic conditions.

The MBA predicts that refinance activity will decline due to a rise in mortgage rates and tight credit conditions. According to the article, rates are predicted to hit 5.1 percent by the end of 2011. This prediction is more or less in line with that of Fannie Mae and Freddie Mac.

Further, the MBA predicted mortgage originations to fall to $1.1 trillion in 2011, down from $1.4 trillion in 2010 and $2.1 trillion in 2009. Do you work in the real estate industry? How do you intend to deal with this situation? Let me know in the comments section below.

Category: First Time Home Buyer, Fixed Rate Mortgages, Jumbo Mortgage, Mortgage Interest Rates

Jumbo Mortgage Rates at Total Mortgage

By Staff on July 20, 2010

Total Mortgage currently has a wide variety of jumbo mortgages, all of which are available with some of the lowest jumbo mortgage rates. Jumbo mortgages are for loans that are above the conforming limit set by Fannie Mae and Freddie Mac. In most areas the conforming limit is $417,000, but in higher cost areas the conforming limit may be higher. To find out the conforming limit in your area try out our new conforming loan limits calculator.

Total Mortgage is currently offering both 30 year and 15 year fixed jumbo mortgages. A 30 year fixed jumbo mortgage is currently available with a 5.000% mortgage rate and a 5.203% APR. A 15 year fixed jumbo mortgage has a 4.000% rate and 4.349% APR.

There are also multiple jumbo adjustable rate mortgages (ARM) available at Total Mortgage. A 5/1 jumbo ARM is currently being offered with a 3.625% rate and a 3.657% APR. A 1/1 Jumbo ARM, with borrowers paying no points, is available with a 3.350% rate and a 3.957% APR. For mortgages with even higher loan amounts Total Mortgage offers Super Jumbo Mortgages.

Mortgage Product	Mortgage Rates	APR
30 Year Fixed Jumbo Mortgage	5.000%	5.203%
15 Year Fixed Jumbo Mortgage	4.000%	4.349%
5/1 ARM Jumbo Mortgage	3.625%	3.657%
1/1 ARM Jumbo Mortgage (0 points)	3.350%	3.957%

For more information on jumbo mortgages fill out this form and a mortgage expert will be with you shortly, or call 877-868-2503 for immediate assistance.

* All rates shown are for 30 day rate locks. Longer locks available. The APR for conventional loan amounts is calculated using a loan amount of $417,000, 2 points, a $495 application fee, $500 loan processing fee, $715 underwriting fee and a $16 flood certification fee. The APR for jumbo loan amounts is calculated using a loan amount of $500,000, two points, a $495 application fee, $500 loan processing fee, $715 underwriting fee and a $16 flood certification fee. The APR for FHA loan amounts is calculated using a loan amount of $295,000, two points, a $495 application fee, $500 loan processing fee, $715 underwriting fee and a $16 flood certification fee. Some rates and fees may vary by state. All interest rates listed are for qualified applicants and are subject to mortgage approval. All rates are subject to change without notice.

*All rates are posted with borrowers paying 2 points unless otherwise noted.

Category: Jumbo Mortgage, Mortgage Rates

Today’s Lowest 30 Year Fixed Jumbo Mortgage Rates
By Staff on July 13, 2010

At Total Mortgage a 30 year fixed jumbo mortgage is available with a 5.000% rate and a 5.203% APR. These rates are amongst some of the lowest jumbo mortgage rates in the mortgage industry.

Jumbo mortgages are defined as loans in which the amount being borrowed is above the conforming limit set by Fannie Mae and Freddie Mac. In most areas of the country the conforming limit for a single family home is $417,000. In higher cost living areas such as, Orange County, California or Westchester, New York, the conforming limit could be as high $729,000. To determine the conforming limit in your area give our conforming limit calculator a try.

Jumbo mortgages are often subject to additional fees that a conforming mortgage may not have. Amongst these are premiums on interest rates and usually a minimum 5% down payment. The reason for these fees is that jumbo mortgages are usually much riskier for lenders.

In addition to 30 year fixed jumbo mortgages Total Mortgage also has a 15 year fixed jumbo mortgage as well as a variety of jumbo ARM’s. For more information on jumbo mortgages call 877-868-2503 or fill out this form for a free jumbo mortgage rate quote.

Category: Jumbo Mortgage
Existing Home Sales Fall in February
1 By Mike Battema on March 24, 2010

In addition to new home sales dropping in February, the National Association of Realtors reported that existing home sales fell in February 2010 to a seasonally adjusted annual rate of 5.02 million units, down 0.6% from the 5.05 million units that were sold in January 2010. Despite this drop in sales volume, sales in February were nevertheless up 7% from the 4.69 million units sold in February 2009.

While the snow, sleet and ice are major reasons to blame for keeping potential home buyers indoors, the lack of any soon expiring homebuyer tax credit did not produce the surge in home sales that was seen in the fall and is expected before the April 30 deadline, as homebuyers take advantage of low current mortgage rates to purchase or refinance.

Existing Home Sales Fell in February thanks to snowy conditions and an extended homebuyer tax credit

The national median existing home price was $165,100 in February 2010, down 1.8% from the February 2009 price as a result of distressed homes accounting for 35% of last month’s total sales. The Federal Housing Finance Agency (FHFA) index, which tracks the prices of houses that are sold or guaranteed by Fannie Mae, Freddie Mac or the Federal Home Loan Banks over time, is 13.2% below its April 2007 peak, indicating that low current mortgage rates and depressed home prices make it a strong buyer’s market.

Despite total home sales dropping for the month, existing home sales in the Northeast were up 2.4% and 2.8% in the Midwest, as buyers took advantage of current mortgage rates in states such as Connecticut and Illinois. Despite low mortgage rates in Georgia and Virginia, however, home sales in the South fell 1.1% and 4.7% in the West in February 2010.

The housing recovery is still fragile at the moment, however, now is a great time to capitalize on near record low mortgage rates before they start to rise later in the year. Total Mortgage Services offers some of the best current mortgage rates in the Country. Whether you are looking to refinance your home with a Jumbo loan in New York state or require an FHA loan to purchase your new home in Pennsylvania, call 877-868-2503 today to speak with one of our mortgage professionals.

Category: Current Mortgage Rates, FHA, Jumbo Mortgage, Mortgage Rates, Purchase, Refinance
California Housing Market Shows Signs of Recovery
By Mike Battema on March 19, 2010

Finally, some good news for the California housing market â€“ median home prices are on the rise. According to a report released by MDA DataQuick, a La Jolla, California housing-data provider, California’s median home price rose from $224,000 in February 2009 to $249,000 in February 2010, an increase of 11.2%. Thanks to record low current mortgage rates and a shift in home-buyer interests, the California housing market is showing signs of stabilization.

Median Home Prices Rose 11.2% from February 2009 to February 2010

The 11.2% boost in median sales prices represents the largest year-over-year jump in California home prices since March 2006. The driving force behind the current surge in prices is the fact that consumers have at last begun showing interest in costlier properties towards the California coast in lieu of foreclosed bank-owned homes and bargain-basement homes in more inland areas. According to DataQuick analyst Andrew LePage, “There has been a shift in what’s selling and what’s not selling. The high end has woken up, whereas it was comatose a year ago.” To put it in perspective, from February 2009 to February 2010 home prices in:
·    San Francisco Bay rose 20% to $354,000
·    Southern California rose 10% to $275,000 (thanks largely to home values in San Diego increasing by upwards of 13% from their February 2009 levels)
·    Santa Clara County rose 12.5% to $460,000

Despite the increase in home values and indications of recovery, the California housing market and economy still have a long way to go to reach former peak conditions. In February 2010, while default notices were down 37.7% from February 2009, they still increased by 19.7% from January 2010. Unemployment in California still lingers around a high 12.5%. For the California economy to truly recover, these numbers need to decrease dramatically.

Nevertheless, California home prices are still significantly below their peak levels and it is still very much a buyer’s market. Total Mortgage Services offers some of the best current mortgage rates in California for your refinance and purchasing needs. Whether you require an FHA loan in Los Angeles or are looking for a Jumbo loan in Orange County, call 877-868-2503 to speak with one of our mortgage experts today.

Category: Current Mortgage Rates, FHA, Jumbo Mortgage, Mortgage Rates, Purchase, Refinance
Jumbo Mortgage Rates Hit All-Time Low
1 By Michael Kraus on March 2, 2010

Mortgages fall into two broad categories, conforming (sometimes referred to as conventional) mortgages, and jumbo mortgages. Conforming loans are those that are under $417,000, and jumbo mortgages are those that are over $417,000 (although the threshold amount is higher in some localities where property values are very high). Conforming mortgages are so-called because they conform to guidelines established by Freddie Mac and Fannie Mae that do not allow either company to cover a loan of more than $417,000.

Jumbo mortgages are relatively rare, in 2010 they comprised approximately 5% of the overall mortgage market. In 2007 jumbo mortgages made up almost 15% of the total market. One of the reasons for the drop-off is that there is almost no secondary market for jumbo mortgages. Many lending institutions that originate mortgages bundle them into mortgage backed securities (MBS) and resell them to investors on the secondary mortgage market. Many of the investors who purchased jumbo MBS took a bath when the market fell apart and are now skittish about investing. As a result, lenders who issue a jumbo mortgage hold onto it, and if the borrower defaults, the lender takes the loss. While the Federal Reserve has snapped up $1.25 trillion worth of mortgage backed securities, it has not purchased any jumbo MBS, so the market is not being supported by the government.

Recently, delinquencies on jumbo mortgages have hit extraordinarily high numbers, 9.6% in January 2010, which is up 3.7% from the previous year. Further complicating matters is that in the case of a default it may be more difficult for a bank to sell a luxury home in a timely manner to recoup its money because there is a smaller market for these types of homes. Lenders are now more risk-averse than ever, so standards for issuing a jumbo loan are very strict. Many lenders require a down payment of as much as 40% of the value of the home as well as credit scores between 720 and 750.

If you can meet the qualifications for a jumbo mortgage, there is good news. Interest rates on 30 year fixed-rate jumbo loans are at a five year low point, on average 5.88%. The average was as high as 7% only two years ago. Lenders know there is more profit in jumbo loans than in conforming loans, and with the reduced number of suppliers for jumbo loans banks have been able to demand more money for a down payment. As of March 1st, 2010, Total Mortgage Services is offering 30 year jumbo mortgages to qualified lenders at 5.75%. Demand for luxury housing remains low for the time being, but as the economy improves we can expect the market to pick up steam as buyers are enticed to the table by low rates.

These record low mortgage rates will not last forever. Last week the Federal Reserve made clear that it will raise interest rates to combat potential inflation possibly later this year. Total Mortgage Services has many mortgage experts who would like to help you with your jumbo mortgage needs. Contact us today at 888-868-2509 to learn about all your jumbo mortgage options.

Category: Jumbo Mortgage, Mortgage Interest Rates, Mortgage Rate Trends and Analysis, Mortgage Rates