The Bizarre Loan Options Available Via Today’s Jumbo Mortgage Lenders
Jumbo mortgage financing and its low-down payment options don’t require a jumbo-sized loan; an update on today’s mortgage rates and a look at the 5-day trend for interest rates; and, why home buyers and sellers should ignore the CoreLogic S&P Case-Shiller Index and get local about data instead.
Doctors Get 100% Loans With No Mortgage Insurance
Lenders now offer specialized jumbo mortgages available to just about anybody — even people who aren’t borrowing above their local conforming loan limit.
In most parts of the country, Fannie Mae and Freddie Mac enforce mortgage loan size limits of $453,100. Loans above this size can’t be routed through the government-backed groups, forcing buyers of homes to find different mortgage loan options.
Individual mortgage lenders fill the void. If they didn’t, buyers would have no access to mortgage loans above their local limits.
These larger-sized loans are known as non-conforming loans because they don’t conform to Fannie Mae and Freddie Mac standards.
Colloquially, they’re known jumbo mortgages.
Jumbo mortgages are mortgages that exceed loan sizes limit for an area. Limits vary, ranging from $453,100 to $1,307,175, depending on the ZIP code and property type of a home.
- 1-unit homes: $453,100 to $679,650 (in high-cost areas)
- 2-unit homes: $580,150 to $870,225 (in high-cost areas)
- 3-unit homes: $701,250 to $1,051,875 (in high-cost areas)
- 4-unit homes: $871,450 to $1,307,175 (in high-cost areas)
For many home buyers, jumbo home loans make it possible to buy an “expensive” home because, without jumbo loans, home buyers would max out their borrowing at the local mortgage limit.
Jumbo loans also make lending more creative. Because lenders write their own loans, they make their own rules, too.
Jumbo loans make it possible for doctors to purchase homes with nothing down and not be required to pay mortgage insurance each month; retired borrowers can qualify for a mortgage based on their assets and their savings; cash buyers can extract over $1 million from their home as a cash-out refinance.
Jumbo mortgages provide options to home buyers, and the best part is that you don’t have to have a loan size over the local conforming limit to use them. Lenders make jumbo loans available at all loan sizes — from $100,000 to $3 million.
Jumbo loans can help you qualify for your upcoming purchase, regardless of your loan size. Talk with a mortgage lender to find out more about your options.
Today’s Mortgage Rates & Interest Rate Trends
Mortgage rates are rising today.
For the fourth day out of five, mortgage pricing is worsening. Home buyers can afford to buy less home as compared one week ago; and, fewer homeowners are eligible to refinance to lower rates.
The notable exception in refinancing, however, is homeowners with FHA-backed mortgages.
With home equity rising, there’s ample opportunity for today’s FHA homeowners to refinance into a conventional mortgage, which gets rid of FHA MIP payments while offering a lower overall rate.
Today’s mortgage rates are moving as follows:
- Conforming mortgages: Higher
- FHA mortgages: Higher
- VA mortgages: Higher
- USDA mortgages: Higher
- Jumbo mortgages: Higher
Mortgage rates are based more than a dozen factors including your loan size, your credit score, and your property type so the rate a lender quotes you won’t be the same rate quoted to your neighbor.
Your rate is also affected by your efforts to comparison shop.
Mortgage lenders price loans differently and pricing changes daily, so the lender with today’s lowest mortgage rate is unlikely to be the same lender with the lowest rates tomorrow. Shop diligently and talk to two or more lenders.
Statistically, speaking to a second mortgage lender saves $2,000 over the life of your loan. Talk to five mortgage lenders and you could save four thousand dollars or more.
Get Today’s Mortgage Rates
Home Values Up, Says Case-Shiller Index
Home values are rising nationwide, but home buyers can look past the data because it doesn’t matter than value are up nationwide.
What matters is: “How’s the housing market where I want to buy?” And, that’s an answer you won’t get from a national home price tracker.
Among the most popular trackers of home values nationwide is the S&P CoreLogic Case-Shiller Home Price Index. It’s an index used by economists and policy-makers to gauge the health of U.S. economy, and by Wall Street to trade in the futures of U.S. housing.
The Case-Shiller Index shows home values up close to 7 percent over the last 12 months, similar to what other valuation trackers show, including the FHFA House Price Index.
However, for homeowners and active buyers of homes, the Case-Shiller Index is mostly unusable. And, there are three reasons why:
- Home value data is pooled from just 20 cities nationwide
- The index is based on sales contracts that are up to six months old
- Only single-family, standalone homes are included in the index
The Case-Shiller Index, therefore, offers a limited picture of U.S. housing and the health of the market. It also provides no information whatsoever concerning specific neighborhoods, streets, or homes.
Only hedge funds buy homes on a national basis. The rest of us buy local. And, to get the best local data to make a better real estate decision, you’ll want to speak with a local real estate agent; someone who knows the homes and knows the area.
Don’t use national data to make a local housing decision. Get with a real estate agent instead and make a better choice.