Interest rates on jumbo loans have touched lows not seen since 2003 recently – which is good news for homeowners who currently have a jumbo loan or are looking at buying a home and financing it with a jumbo loan.
Courtesy WSJ
According to the WSJ:
Just a year ago, the average rate on a 30-year jumbo mortgage—a loan of more than $729,750 not backed by government-sponsored agencies Fannie Mae or Freddie Mac—was 6.86%, according to Greg McBride, a senior financial analyst at Bankrate.com. Now it is 5.48%—a rate that rivals those available during the height of the credit bonanza.
“In just the past couple of months, jumbo loans have really started to be competitively priced,” says Keith Gumbinger of HSH Associates, a publisher of consumer-loan information.
The recent low rates on jumbo loans has caused an uptick in refinancing activity – with some jumbo lenders reporting that jumbo refinancing up as much as 50% vs. what it was last year.
Jumbo Loan Refinancing Could Mean Big Savings
Because of the large loan amounts, if you can save even a single percent on your interest rate for a jumbo loan, it will add up to a large dollar savings each month. For example, a homeowner with a 30-year fixed-rate $800,000 mortgage at 6.86% pays $5,247 a month. If he were to refinance at 5%, his monthly payments would be reduced by $952.
Jumbo Lenders: Still Available
Finding the right jumbo lender can be tricky – many mortgage brokers are no longer in business. There are still mortgage banks who can help you get your jumbo loan refinanced, and many of the larger banks are offering jumbo loan programs. Be sure to shop around for a jumbo loan, each lender will have different guidelines and different interest rates – and by shopping for your jumbo loan, you will save thousands and get the best possible deal.
