Conforming loan limits were temporarily increased with the inception of the Economic Stimulus Bill in 2008. Under this law, which is in effect until December 31, 2010, the single family residence loan limit is $729,750 in high cost areas around the country. Many loans today will fall into this category. Although these loans have government backing and can be sold to Fannie Mae and Freddie Mac, many banks have chosen to keep them in their own portfolios. With stricter underwriting standards and cash to lend, jumbo mortgages now carry less risk for lending institutions.

One of the biggest decisions facing home owners who want to refinance a jumbo mortgage is picking the lender to do the transaction. As with any other type of mortgage, home owners must do some research to find where they will get the best deal. The first and obvious place to look is your current lender. Home owners should ask their mortgage holder about their refinance rates and the fees associated with the transaction. Many will find that closing costs can be very little to nothing at all when refinancing with their current lender. For many borrowers, this can be the easiest and most affordable option.

As there are very few brokers still in the mortgage industry, the big banks have taken over the bulk of the business. With big banks looking to expand their jumbo loan lending business, the competition with interest rates has been heating up. JP Morgan Chase, Citibank, Bank of America and Wells Fargo are all looking to write loans for home owners that qualify for a jumbo mortgage refinance since this group, usually holding good credit and stable jobs, is now considered low risk. As the advertised jumbo mortgage interest rates for each of these banks is similar or very competitive, it is more important for home owners to negotiate bank fees to get the best deal. These banks are willing to give incentives, such as lower rates, in exchange for customers opening checking and savings accounts or automatic mortgage payment withdrawals.

Home owners should compare any quotes they receive with the internet. A simple search for a $729,500 refinance for 30 years with Wells Fargo came back with 5.25% with zero points, 4.75% with 2 points and 4.875% with 1 point. The results were the same for an $800,000 loan. Borrowers can then input the information into a mortgage calculator on the internet to determine their monthly payment. As each situation is different, each home owner needs to individually decide what is more important for them, a lower interest rate or lower costs and fees.

No matter where a home owner is searching, it is important to find out all of the closing costs upfront in order to make the right decision. Request that all fees, such as origination fee, appraisal cost, credit costs, points and escrows be put in writing. Also ask about the approval process and amount of time involved to finalize the transaction. No matter who is chosen, search the internet for customer reviews as good customer service and satisfaction is an important part of the process.

As most of today’s banking is a self service industry with debit cards, credit cards, ATM machines and internet banking, so is it the same for mortgage refinancing. Home owners need to be prepared with their documentation and ready to take the plunge on a good refinance opportunity. Although it can be as easy as asking friends, co-workers and family for recommendations when searching where to go to refinance your jumbo mortgage, it is better to do some investigating on your own so that you are are satisfied with the final results.

Historically, jumbo mortgage rates were higher than conforming loan rates due to their considerable riskiness. But, recent developments in the mortgage lending business have made jumbo mortgage loans more attractive to banks and borrowers.

In order to avoid a government take-over, banks are motivated to provide more options to borrowers by way of jumbo mortgages. President Barack Obama signed new financial reform legislation last month, the Dodd-Frank Act, which permits the Federal Deposit Insurance Corporation (FDIC) to dismantle any financial institutions deemed “systemically risky,” forces banks to increase capital reserves, and enforces these regulations via a new consumer financial protection bureau.

In comparison to non-conforming jumbo loans, FHA-insured loans cost more. The annual percentage rate of an FHA-insured loan is 5.178 percent, whereas the APR of a jumbo loan is 5.098 percent. This year the Federal Housing Administration has reduced allotted seller concessions, increased down payment requirements, and increased mortgage insurance premiums. The FHA is floundering about for liquid assets because an audit revealed that capital reserves dipped to 0.53 percent, which Congress has mandated cannot be less than 2 percent. The FHA Commissioner, David Stevens, reported that the FHA seeks to decrease its market share by making it more difficult to qualify for FHA loans.

Big banks, such as J.P. Morgan Chase, Citibank, and Wells Fargo, are capitalizing on these recent developments by expanding jumbo lending practices. Some banks offer jumbo loans for as low as 10% down, 65 percent LTV, and $10 million mortgages. Jumbo loans are less risky because default rates are relatively low as most banks require a credit score above 680.

Of seven major housing markets, Redfin Corp. reports that less than half of active listings in 2009 resulted in sales. But, the aggressive pursuit of jumbo mortgages loans has provided a much needed boost in the luxury housing market. Pending sales in the luxury housing market is the only pricing category that increased in the past month. According to National Association of Realtors spokesman, Walter Maloney, the sales volume for homes over $1 million is up more than 35 percent from this time last year and homes between $700,000 and $1 million is up by 29 percent over last year. Maloney attributes these increases to the recent affordability and availability of jumbo mortgage loans.

The government could feasible put a wrench into the positive movement of jumbo loans by way of the Dodd-Frank Act. Just released Monday, the Federal Reserve Board is proposing a revision of escrow account requirements for first-lien jumbo loans. In order to determine whether a lender ought to establish an escrow account for property taxes and insurance, an APR threshold of 1.5 percentage points is currently applied. The Fed will increase the APR limit to 2.5 percentage points.

Although it is tough to determine how low interest rates will go, it is reasonable to assume that a rate increase will hurt the housing market. As unemployment grazes double digits and Fannie and Freddie file for additional government bailouts, a double-dip in the housing market is not in the best interest of the current administration and definitely not beneficial for Americans.

At the same time when breaking the big banks apart was being considered, most regulatory and statutory decisions that were made over the past two years were done in favor of the big banks. Infused with taxpayer capital and takeovers of other failing large institutions, these banks became bigger. Taking over other institutions increased their real estate and presence in communities throughout the nation thereby squeezing out the smaller banks and luring in their customers. They are now able to offer aggressive, competitive and lower mortgage rates than the smaller players due to their lower fund costs. Despite big banks ability to lend at lower rates, most have opted to give out higher rates for bigger profits. As banks reined in their wholesale lending, mortgage brokers were affected and many closed their doors. Increased regulation and licensing for mortgage brokers is keeping this part of the mortgage industry subdued while giving increased business to the big banks.

Servicing mortgage loans also helped to create these big banks. Bank of America became the top loan servicer after taking over Countrywide with Wells Fargo in second place and JP Morgan Chase in third place. While these banks enjoy guaranteed servicing and processing fees, many of these loans being serviced were also modified which ultimately added to their growth.

The latest financial overhaul legislation does not include any halt of the market power and market concentration that the biggest banks currently have. Financial reform includes the return to plain, old fashioned, qualified loans that are easy to be bought and sold on the secondary market. Although not as profitable as sub-prime loans, these old fashioned loans will dominate the mortgage market in the future. By originating these loans and making money in volume and quantity, the big banks will dominate the mortgage industry more than they do today. Concentration of the mortgage industry will lead to fewer players and will lie in the hands of the biggest lenders. Right now, big banks are originating the vast majority of the market share and will continue to do so in the future.

Other Wells Fargo 30-yr fixed mortgage rates today include their FHA 30 year fixed, at 5% with a 5.717% APR, their jumbo conforming 30 year fixed at 5, with a 5.123 % APR ,  conforming jumbo FHA 30 year fixed, at 5.125% with a 5.794 APR, and the true jumbo 30 year fixed, at 5.5% with a 5.643 APR.

Perhaps Wells Fargo’s 30 year fixed true jumbo mortgage (exceeds jumbo conforming loan limits) is their strongest program.

I spoke with Jeff Bowman recently, of the jumbo specialty lender TheGreatLoan.com, and he told me 5.5 on a true jumbo loan (Wells Fargo and TheGreatLoan.com offer this rate)  is the best rate out there and could only be done for extremely well-qualified borrowers with a very low LTV.

Consumers may want to search local mortgage rates for free, viewing offers from local lenders sorted on a rate table, before choosing a lender. Rates are usually available to well-qualified borrowers at least 1/4 below national averages reported by Freddie Mac.

Source: WellsFargo.com

Two programs that stand out are Wells Fargo’s 15 year fixed conforming mortgage, at 4.25% and Wells Fargo’s 30 year fixed jumbo rate of 5.75%. Especially on that 30 year fixed jumbo mortgage, Wells Fargo proves tough to beat.

See the chart below of Wells Fargo Mortgage Rates Today.

Source: wellsfargo.com/mortgage/rates/

Another program Wells Fargo knocks it out the box on is their jumbo 30 year fixed rate. Wells Fargo offers a true jumbo loan, fixed for 30 years, at 5.75% with a 5.895% APR. If you are looking for short term financing, Wells Fargo also offers a jumbo 5 year adjustable mortgage rate at 5.000%. Usually, borrowers who are temporarily relocating, possibly due to a change in employment, or just do not want to make monthly payments on the higher mortgage rates, are interested in adjustable rate mortgages. Although adjustable rate mortgages are not for everyone, they still serve their purpose for those who fully understand that they change somewhere along the line. For rates on your website or blog try our mortgage rate widget.

Below is a table of Wells Fargo mortgage rates today.

Source: wellsfargo.com

If you’re currently in a loan and considering refinance you may want to also take a look a modification under the government’s Home Affordable Modification Program. Wells Fargo said last week they provided payment relief to half a million borrowers in 2009 alone.

Below is a table with Wells Fargo mortgage rates today.

source: https://www.wellsfargo.com/mortgage/rates/

source: https://www.wellsfargo.com/mortgage/rates/

Source: https://www.wellsfargo.com/mortgage/rates/