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Mortgage Rates

Jumbo Mortgage Guidelines Are A Sign of the Times

Looking back approximately five years ago, mortgages and their respective guidelines were quite different. There were, at that time, many different types of loans including different programs for jumbo mortgages. This is not the case in the current mortgage market that has made a complete turn around. As with all mortgages, current jumbo mortgage guidelines are a sign of the times. The decline of the housing market saw many mortgage programs become extinct. Stricter lending standards across the board for all mortgage loan types became the norm and are still in place today. In particular, jumbo mortgage borrowers may find that it is more difficult to receive loan approval. In the past, having a good credit score and a low down payment was often all that was needed. In today's mortgage market, jumbo mortgages require a credit score over 700 and often as high as 740. A minimum of 20% down payment in now required and must come from the borrower's own funds that can be documented with recent bank statements. Gifts for the down payment are not permitted with jumbo mortgages. Income, whether an employee or self employed, must be fully documented with pay stubs, w2's and income tax returns. In some cases, even business income tax returns are required by the lender. DTI (debt to income) ratios have come down to approximately 38% for jumbo mortgage approval which can be difficult for some borrowers. Jumbo mortgages require that the property must be the primary residence of the borrower and cannot be used as vacation homes, second homes or investment property. Even the property valuation can cause issues with approval and often requires more than one appraisal to confirm the market value. On the positive side, jumbo mortgage rates are at all time lows. Borrowers who want long term security can choose a jumbo 30 year fixed mortgage rate at 4.125% or a jumbo 15 year fixed mortgage rates at 3.375%. For lower monthly mortgage payments, jumbo 5/1 adjustable mortgage rates are at 2.500%. These are the lowest available with 0.7 to 1% origination fee. As compared to the past when jumbo mortgage rates were much higher, current jumbo mortgage rates are not much higher than conforming and FHA mortgage rates. All mortgage programs have changed in recent years and jumbo mortgages are a part of the transition. Jumbo mortgages involve a larger amount of money and lenders are not going to take chances of a default because these properties are more difficult to sell. Since there is a much smaller market of buyers for homes that require jumbo mortgages, it is only normal that lenders would become stricter in order to reduce their exposure and risk. FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard .07 to 1% point origination fee.

 
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FHA Mortgage 101

  • Conventional vs. FHA mortgage, the difference
  • Conventional vs. FHA mortgage, the difference
  • Conventional vs. FHA mortgage, the difference
  • Conventional vs. FHA mortgage, the difference
  • Conventional vs. FHA mortgage, the difference
  • Conventional vs. FHA mortgage, the difference
  • Conventional vs. FHA mortgage, the difference
  • Conventional vs. FHA mortgage, the difference
  • Conventional vs. FHA mortgage, the difference
  • Conventional vs. FHA mortgage, the difference