January 17th, 2009 1:22 PM by Diego Quintero
In the mortgage industry we have Jumbo loans and Conforming loans. Anything below $417,000 is considered conforming, anything above is a Jumbo. Conforming loans are those that Fannie Mae can insure and/or buy for for servicing purposes. Jumbo products are a risky product for a bank to lend on because they are non-insurable and there's a limited amount of buyers who want to service them, hence the higher rates and costs that are associated with them. The good news is, however, that this kind of market makes it affordable since all interest rates are low.
I have been asked by several agents, past clients, and fellow blog readers to write-up an estimate of rates and a brief scenario to get a better idea. Please note that not all applicants qualify. Restrictions are based upon income, credit, market conditions, and acceptable collateral. Rates are subject to change without notice.
A home valued at $750K needs to get refinanced. John Consumer, who has a 720 Fico score & 1 year at the same job wants to cash-out $100K for whatever he wants. The loan amount can be 75% of the value of the home. So, a loan amount of $562,500 would be appropriate for this scenario.
Let's suppose that Mr. Consumer only wants to stay in the property for another 8 years. We can save a little on interest if we do a 10-yr fixed program instead of a 30-year fixed. John's rate would be 6.25%, with an APR of 6.345%- based on today's rates. His payments would be at $3463.41/month, plus taxes and insurance. There are minor adjustments to the rates as you increase the risk for the bank. For example, a 30-yr fixed-rate, an interest-only program, or a loan amount greater than $600K would add a slight bump to the rate. They add a risk to the loan program based on longer repayment or a larger, uninsurable loan.
Its simple to get an idea of which rate would apply to your scenario, whether Jumbo or Conforming. Your information is private and confidential and its FREE to find out. If you would like to know just send me an email or apply online.
Thanks for reading!
Your Mortgage Professional,
Diego L. Quintero
QUICK FACTS : You may choose to include or exclude tax & insurance payments in this Jumbo program with no additional rate increases. Loans can be closed being 1 day off-market, but cash-out will not be allowed. Maximum allowed cash-in-hand at close is $300,000!