Jumbo Mortgage Rates too high???

Jumbo mortgage rates (those in excess of $729,750) are now in the 6.25% to 6.5%range, which many people consider to be too high, when compared to the extremely low rates for conforming mortgages (those less than $417,000) which are below 5%. What potential borrowers need to consider is that these rates, although high compared to conforming loans, are still quite low compared to the last 10 years.

HSH Associates (http://www.hsh.com/. ) notes in their latest newsletter that “Jumbo 30-year FRMs continued to decline; the week’s 6.44% puts us back at rates last seen two years ago this week.Since the turn of the decade, some 480 weeks have elapsed. Those contending that jumbo rates are “too high” would do well to learn that only 166 of those 480 weeks have featured an average interest rate below this week’s value — and that the remaining 314 have not only been above (but often well above) today’s figure. As a reference point, we are only about 89 basis points from the decade’s low average for Jumbos, but 253 below the high.’

The one significant thing affecting jumbo loans, however, is the limited number of lenders making jumbo loans. Many jumbo loans are limited to only a maximum of $1,000,000, must have a FICO score in excess of 750. These loans also require a large down payment.There are several lenders making jumbo loans, and a good mortgage broker should be able to arrange one for you.

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