What Does the Future Hold For Jumbo Loans?
Jumbo mortgages, a home loan of over $417,000 in most parts of the country and $729, 750 in others, are a fading product in today’s mortgage industry. The inflated loan amount presents added risks for lenders, forcing them to increase the restrictions and qualifications they place on borrowers.
Moreover, the government’s latest initiatives aimed at lowering mortgage rates aren’t designed to help the jumbo market. The Fed’s decision last week to increase their commitment to purchasing Fannie and Freddie mortgage-backed securities sent conforming rates plunging — increasing the interest-rate spread between conforming and jumbos to 1.56%.
