According to Julian Hebron at RPM, local 30-year jumbo-conforming mortgages are currently being offered for around 6.625%. That’s a 0.25% (25 bps) discount to jumbo rates (6.875%) but a 0.625% (62.5 bps) premium over conforming (6.0%).
∙ If Lowering Rates Isn’t Working, Perhaps Increasing Limits Will [SocketSite]
Show me a lender offering 30 year jumbo rates at 6.875% and I will jump on that. Reality is closer to 7.5% for a no point 30 year fixed jumbo.
Just curious – are loans (first OR second mortgages) still being made to applicants with ‘stated income’, assuming that they have decent FICO scores and 80% LTV?
with a big enough down payment and good enough credit quality and income, I’m sure you could get rates as low as 6.875%.
the larger issue is that the jumbo-conforming loans have an interest rate that is not much better than the jumbos, and also not as good as what you could have gotten a few years ago (when they were considered “jumbo”)
this was predictable.
as always, as the mortgage market continues to deteriorate the lending will continue to tighten. in general the people who will qualify for loans are those that don’t need them very much.
in order for RE to “take off” again, mortgages would need to fall down to the 5.25-5.75% range again, unlikely to happen IMO.
again, we’re going back towards “normal” lending. That means rates in the 7-8% range with downpayments and documented income. all good IMO.
Sorry ex SF-er, you miss the mark on what really is possible. True jumbo loan rates (>729k now) aren’t close to 6.875% regardless of credit score, reserves, down payment, etc. I agree with most of the rest of your post.
Lower rates are neccessary to bring stability back to mortgage lending. Getting buyers off the sidelines would end price declines for the liened asset. It is the unknown value of the underlying asset that has wrecked the lending market.
Prudent lending standards should also lower spreads for mortgage debt, but this won’t happen until prices stablize. Instead we have tighter lending standards and much wider spreads for mortgage-backed securites if a market can be found at all.
Its just the pendulum swinging the other way. It takes time to come back to middle…
I heard long term rates will go up because of inflation and general consensus that FED will not drop rates any more..
“Show me a lender offering 30 year jumbo rates at 6.875% and I will jump on that. Reality is closer to 7.5% for a no point 30 year fixed jumbo.”
Credit unions have good rates so long as your finances are sensible:
https://www.starone.org/site/rates.html#fixre (6.5%)
http://homeloans.addisonavenue.com/rates.asp (6.875%)
Early last month, we got a 30 year jumbo-conforming for 6.375% (no points) through Wells Fargo. Full doc, good credit, loan for less than 80% of value. We would love it if rates go even lower so that we can refinance later this year, but it doesn’t sound like that will happen.
theloanphd, I am going to save you a load of money. Can I get a 1 point fee?
https://www.penfed.org/productsAndRates/mortgages/mortgageCenter.asp
30-year fixed jumbo, 6.125%, 0 point.
i am continually amazed at the rates that people quote, and/or pay for 30 year jumbos
sorry editor, but your source on the 6.875 30 yr jumbo, that just isn’t even close to competitive – not shopping for a better rate than that would be idiotic. John quoted penfed’s at 75 bps lower, and I suspect that represents the low end of rates. But it should be easy (with good credit) to get a rate close to that from a local broker/ lender.
Pentagon Federal Credit Union is specific to military personnel and family.
But they have a great rate.
Addison Avenue APR 30 years Jumbo is 7.006% after “discount rate”. With 20% down, 740+ FICO.
I’m amazed by Star One, though. 6.15% on conforming Jumbo and 6.5% on pure Jumbo (but less than 1M according to small print disclaimer at bottom of page).
You can join the National Military Family Association (I know, in SF that thought is seemingly anathema) which then allows you to become a Penfed member. Star One is quite good too though. Bottom line, if you are lazy about doing your mortgage research, you deserve the crappy rate you get.
San FronziScheme,
You just need to join National Military Family Association (NMFA) ($20 one-time fee) to be eligible for penfed.
https://www.penfed.org/howToJoin/overview.asp
Maybe they have other restrictions or maybe the rate is higher than CA. The point is, you can find better rate than that 6.85% (trying to scare off potential buyers?) quoted by SS.
And if you are OK with ARM, the rate is even lower.