Jumbo Financing is Returning!

When the credit crisis hit in late 2007, jumbo financing all but disappeared overnight. Unlike conventional loans, jumbo loans are not purchased by Fannie Mae or Freddie Mac…rather private investors on the secondary market purchase these loans. With private investors spooked by the fallout of the subprime loans, there was no longer a market for jumbo loans. Without a market to sell to, lenders had to either decide to hold jumbo loans in their portfolio, or stop funding them altogether.

Most lenders took the conservative route and stopped funding jumbo loans. Nearly 18 months later, we are slowly starting to see jumbo loans emerge back into the market. Just this week, we have seen expanded programs for jumbo loans introduced. For those looking for low down payment options, FHA loans are available with a 3.5% down payment up to loan amounts of $567,500. As of this week, the new ‘conventional jumbo’ limit is being increased to $567,500 with a 10% down payment. Above these limits, we now have fixed rate programs available with a down payment of 30% up to loan amounts of $1,000,000, with 30 year fixed rates in the range of 5.25% - 5.625%. Jumbo 5 year ARM’s are available with a 30% down payment with rates in the range of 4.5% -5.0%. This provides great financing options for those looking to purchase or refinance in the upper price ranges and home values.

Call today to learn more about these tremendous opportunities!

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@loancentral.com