“Jumbo” Mortgage Rates Make History Falling Below Traditional Rates

As banks are competing for affluent borrowers, an odd trend has emerged in the mortgage industry: interest rates on loans for pricey homes , also called “Jumbo” mortgages, have suddenly dropped below those for smaller mortgages. This is an event that lending executives say has never happened before.
Jumbo mortgages are those that exceed the $417,000 limit. Interest rates for Jumbo loans, historically have been set higher than rates on what are known as conforming loans, which are backed by government agencies.
But suddenly, the relationship has flipped, and jumbo mortgage loans are currently more attractive. The average 30 yr fixed rate conforming mortgage was 4.73% last week, compared with 4.71% for the average Jumbo 30 yr mortgage.
Experts say the change in rates, between jumbo and conforming loans is unprecedented. Banks are getting more comfortable because housing prices are rising. Banks are also courting Jumbo borrowers because they typically have deeper pockets. They use their relationship with those specific clients to sell them other products.
For those in the luxury home market, whether buying or selling, take note of this rare event.

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Kristie Scivicque

REALTOR®
KRISTIE & CO
KELLER WILLIAMS REALTY

PREMIER PARTNERS
Denham SpringsCell (225) 955-5250
Office (225) 664-1911
www.PropertiesByKristie.com
www.kristieandco.com

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