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More Jumbo Lenders Willing To Lend

If you live in places like New York and are looking for a jumbo loan, chances are that you may have noticed that some lenders are coming back into the market.

Not all lenders, mind you  – but at least a few are starting to loan people with great credit and healthy down payments jumbo loans up to as high as $10 million.

In the tri-state area, jumbo loans are loans that exceed $729,750 – and with the real estate market not losing ground as rapidly (and actually rising in some areas) as it has in recent years – more people are ready to settle into a larger loan amount.

Courtesy HSH / WSJ

What kind of interest rates can you expect when thinking about jumbo loan financing? According to the Wall Street Journal, jumbo loans are getting more competitive with regards to price.

Gibraltar Private Bank & Trust, based in Coral Gables, Fla., has been particularly competitive, offering jumbo loans as large as $10 million. “It’s a clear differentiator that we are aggressively lending to the affluent in New York,” says Chris Damian, Gibraltar’s chief lending officer. “We’re doubling our lending staff in the New York market by year-end, which is an indication that this market is booming.”

Interest rates on jumbos typically are higher than rates on smaller mortgages, but the gap has narrowed in the past year. Overall, jumbo mortgages offered in the New York area on a 30-year jumbo loan have declined to 5.59% as of last week from an average of 6.35% a year ago and to 5.13% from 5.91% on a 15-year jumbo loan, according to HSH.

But several small local banks are offering jumbos under 5%. For example, on Monday, Valley National Bank was advertising 30-year jumbos at 4.75% and 15-year jumbos at 4.5%, according to the bank’s website.

The cost of adjustable-rate jumbo mortgages is also falling. On Monday, Apple Bank lowered its rate on a five-year adjustable rate mortgage to 4.25% from 4.5%. A few banks, including J.P. Morgan Chase, are offering rates as low as 3.75% for borrowers making a down payment of at least 20%.

So if you happen to be in the market for jumbo loan financing – look for lower interest rates and more jumbo loan lenders willing to loan you money.

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