The timing couldn’t be better for those buyers looking to purchase higher end homes. Instead of putting more down to get to a conforming loan amount, it may cost less for a larger mortgage.
Borrowing rates for jumbo mortgages are typically priced ½% higher than conforming loans, which are backed by Fannie Mae and Freddie Mac. In the last few weeks, the difference between jumbo and conforming loans has narrowed and in some cases, jumbo rates are lower than conforming. Conforming 30 YR fixed is currently at 4.875% vs. 5.00% for 30 YR fixed jumbo mortgages. The 7 YR ARM is currently 4.375% for conforming loans vs. 4.00% for jumbo. This is unprecedented that jumbo rates are less than conforming rates.
Jumbo mortgages are those that exceed $417,000.