George Nettles, Denver CO – I just read an article from CNNMoney in the Realtor Magazine with the above title and just about flipped! I have worked a lot with clients with Jumbo loans – loans over $417K in Denver Metro – and there has been a lot of frustration since the financial meltdown in 2008. For so long, rates on these loans have been much higher than normal loans even with my clients’ superb financials.
Here is the article by Les Christie from CNNMoney, Nov 12, 2013:
In an unusual move, jumbo mortgages are becoming a bigger bargain over conforming loans.
Lenders are offering jumbo mortgages at lower rates — more than a quarter of a percentage point — than conforming loans that are backed by Fannie Mae and Freddie Mac, CNNMoney reports.
“The government-run agencies require conforming loans to be below $417,000, unless they are for homes in high-cost areas like New York or Los Angeles,where the limit is $625,500,” CNNMoney reports.
Generally, banks charge higher rates on jumbo mortgages, typically about a quarter of a percentage point more than conforming loans, according to the Mortgage Bankers Association. But recently that has reversed.
For example, Wells Fargo is offering a 30-year jumbo mortgage rate this week at 4.125 percent. In comparison, it is offering a 30-year fixed-rate conforming mortgage at 4.5 percent. US Bank is offering a jumbo mortgage rate for 3.875 percent, compared with 4.25 percent for a conforming loan.
“Never in my memory have jumbos been such a bargain,” Peter Grabel, a loan officer at Luxury Mortgage Corp. in Stamford, Ct., told CNNMoney.
Source: “Rich people are getting mortgages cheaper than you,” CNNMoney (Nov. 12, 2013)
*George Nettles is an Associate Broker with Brokers Guild Cherry Creek in Denver, CO. He is the founder of www.LuxuryHomesInDenver.com and Denver’s Luxury Home Team and can be reached at 303-981-7282 or George@LuxuryHomesInDenver.com