If you can qualify, there hasn’t been a time when jumbo loans were any cheaper. Take a look at what interest rates on jumbo loans have done over the last few years according to HSH associates:
According to a story that recently ran in the Wall Street Journal:
“More lenders are starting to ‘get it’ and are coming to the table with more aggressive pricing,” says Alan Rosenbaum, chief executive of New York City brokerage Guardhill Financial Corp. He says that both prices and product offerings have improved from one year ago.
Citigroup Inc. began advertising a 5.63% rate on 30-year fixed-rate jumbo loans, and five-year adjustable jumbos as low as 4.87% for banking customers in New York and California. “There are a lot of really good buyers who are under-served today,” says Sanjiv Das, chief executive of CitiMortgage.
More banks are coming back because credit standards are very stringent, which makes the default risk low on these loans—especially if prices are nearing a bottom. Citigroup underwrote last month’s securitization deal for Redwood Trust, and those 222 loans had a weighted average credit score of 768. Many loans had loan-to-value ratios of 60% or lower. “Even if there was a sharp drop in housing, this was a pretty safe bet,” says Mr. Das.
Jumbo Loans: What It Takes To Qualify
Generally speaking, when it comes to getting a jumbo loan, banks are requiring at least 20% down for jumbos up to $1 million, at least 30% down up to $2 million, and often more for loans north of that. In addition to a healthy down payment, if you are interested in getting a jumbo loan, you are going to need to have a great credit score — at least a 720 and sometimes even higher.
It also may depend on what part of the country you live in — some banks have different jumbo loan lending guidelines depending on the area of the country you live in.
