Fixed Rate Mortgage for Jumbo Purchases
Within the past few years a Jumbo home loan with a fixed interest rate was nearly impossible to find. Thankfully, the improving home market and the surge in sales over $417,000 have brought back the fixed interest rate mortgage. The rates are quite attractive as well.
Great Time to Purchase
When home values and sales dropped during the crisis in the mortgage industry many lenders stopped offering jumbo loans altogether. Other lenders still offered the loans but only with an adjustable rate. The loan could be fixed for 1, 3, 5 or 7 years but then fluctuate after that. Now that the overall mortgage market is improving many lenders are finding it possible once again to sell their portfolio of mortgage loans to secondary investors. This makes it possible for lenders to once again offer the fixed rate loans.
The rates for Jumbo Fixed loans are hovering around between 4% and 4.25%. That may not sound like a substantial difference from the 4.5% to 4.75& range that was common in April of 2012, but we are talking about a Jumbo loan. This small rate change can lower the monthly mortgage payment by $200
Good for Refinancing Too
The resurgence of the 30 year fixed term also brings good news for people looking to refinance a jumbo mortgage loan. People who purchased a home within the last 3 or 4 years using an adjustable rate loan should take advantage of the low rates currently offered for a fixed rate loan. As seen from the example above, even a small adjustment to the rate can yield significant savings. Given the fact that people who purchased a home priced over $417,000 in the past few years had to pay a minimum of 15-20% down, they should be in a good equity position to refinance.
Whether buying or refinancing, the improved stability of the mortgage market is a good thing for the jumbo loan crowd and beyond. These loans are usually utilized by people who either start their own company or are currently self-employed. More stability for their personal finances will free up time, energy and money to put back in to their business. That type of investment normally results in a few more jobs and better innovation in the marketplace, making a win-win for us all.