The Best Jim Clooney Site
  • Home
  • Blog
  • Links

Rich people are getting mortgages cheaper than you

11/12/2013

0 Comments

 
Rich homebuyers can now get mortgages cheaper than pretty much everyone else.

In an unusual twist, lenders are offering rates on jumbo mortgages that are more than a quarter of a percentage point lower than those on the conforming loans backed by Fannie Mae and Freddie Mac. The government-run agencies require conforming loans to be below $417,000, unless they are for homes in high-cost areas like New York or Los Angeles,where the limit is $625,500.

Jumbo loans exceed those dollar limits and, historically, banks charge higher rates on them -- about 0.25 percentage points more -- than they do for conforming loans, according to the Mortgage Bankers Association. But over the past couple of months, the tables have turned.

This week, Wells Fargo (WFC, Fortune 500) advertised a 30-year jumbo mortgage at a rate of 4.125%, significantly lower than the 4.5% rate it is offering for a 30-year, fixed-rate conforming loan. US Bank (USB, Fortune 500) is offering a jumbo for 3.875% this week compared with 4.25% for a conforming loan. And Chase's (JPM, Fortune 500) jumbos have been running a quarter of a percentage point below conventional mortgages, as have TD Bank's (TD).

"Never in my memory have jumbos been such a bargain," said Peter Grabel, a loan officer at Luxury Mortgage Corp. in Stamford, Ct., with 13 years on the job.

One big reason jumbo rates are so low is because lenders want to attract wealthy clients and hang on to them, said Malcolm Hollensteiner, head of consumer lending for TD Bank. Once clients sign up for a mortgage, the bank can "cross sell them other products, like brokerage services," he said.

That works especially well in these days of strict underwriting standards, according to Keith Gumbinger, a mortgage expert with HSH.com.

"Borrowers have to open up their whole financial picture to lenders," he said. "They can see where there's value, which they might be able to sell against."

Once a wealthy client takes out one of these low-rate loans, they are likely to stick around. "With rates as low as they are, borrowers are never going to refinance the loans. Those affluent clients will stay on the bank's books forever," said Gumbinger.

Jumbo loans have also gotten comparatively cheaper. As the Federal Housing Finance Agency (FHFA), which regulates Fannie and Freddie, seeks to boost the two agencies' reserves against losses from mortgage defaults, it has raised fees and other costs for borrowers, according to Terry Francisco, a Bank of America spokesman.

Since Fannie and Freddie don't back jumbo mortgages, those fees don't apply and therefore aren't passed on to borrowers. 

Read More: http://money.cnn.com/2013/11/12/real_estate/jumbo-mortgages/
Follow me:

  • James Clooney | Carbonmade.com
  • James Clooney - Magnt
  • James Clooney on Gather
  • James Clooney - Listal
  • James Clooney Blog
  • James Clooney | WordPress
  • James Clooney on Quora
  • Jim Clooney Twitter Page
  • James Clooney Mortgage
  • Jim Clooney Mortgages
0 Comments



Leave a Reply.

    Author

    • Jim Clooney on Gather
    • Jim Clooney - Listal
    • Jim Clooney's Blog
    • Jim Clooney | WordPress
    • Jim Clooney on Quora
    • Jim Clooney's Twitter Page
    • Jim Clooney CO
    • Jim Clooney WS
    • Jim Clooney Tennis
    • Jim Clooney - Bigsight
    • James Clooney
    • Total SAI - Jim Clooney

    Archives

    April 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013

    Categories

    All
    Adjustable Rate Mortgages
    Heloc
    Home Prices
    Home Sales
    Housing Market
    Housing Market
    Interest Rates
    James Clooney
    Jim Clooney
    Mortgage
    Mortgage Facts
    Mortgages
    Refinance
    Reverse Mortgages
    Rising Rates
    Tennis
    Total Solutions Advisors Inc
    Underwater Mortgages
    Underwater Mortgages
    Wimbledon

    RSS Feed

    Links
    • Jim Clooney on Gather
    • Jim Clooney - Listal
    • Jim Clooney's Blog
    • Jim Clooney | WordPress
    • Jim Clooney on Quora
    • Jim Clooney's Twitter Page
    • Jim Clooney CO
    • Jim Clooney WS
    • Jim Clooney Tennis
    • Jim Clooney - Bigsight
    • James Clooney
    • Total SAI - Jim Clooney


Powered by Create your own unique website with customizable templates.