You’ll pay more for a big home nowadays, but a big mortgage should be less of a reach.
For the first time in over 20 years, rates on jumbo mortgages — loans of more than $417,000, or $625,500 in pricier areas — are at or below rates on conventional mortgages. Jumbo rates usually run one-quarter to one-half of a percentage point higher, but lenders eager for wealthier customers are making deals.
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In 2013, Wells Fargo and Bank of America cut minimum down payments to 15% from 20%; some competitors did too.
“It’s a good time to be a jumbo borrower,” says Guy Cecala, CEO of Inside Mortgage Finance.
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Currently, rates for a 30-year fixed jumbo are averaging 4.25%, compared to 4.35% for a conventional 30-year fixed-rate mortgage. For ultralow rates, check out adjustable-rate jumbos: Wells Fargo recently offered a five-year adjustable for 2.375%. Get an ARM, though, only if you expect to move on during the fixed period.
Source: Money Magazine First Published: February 7, 2014: 4:08 PM
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