Hurdles shrink for jumbo loan shoppers

By Donna Rosato  @Money February 7, 2014

http://money.cnn.com/2014/01/01/real_estate/jumbo-mortgages.moneymag/index.html?section=money_realestate

 
jumbo mortgageThinking about buying a big home? Lenders are making deals on jumbo mortgages.

(Money Magazine)

You’ll pay more for a big home nowadays, but a big mortgage should be less of a reach.

For the first time in over 20 years, rates on jumbo mortgages — loans of more than $417,000, or $625,500 in pricier areas — are at or below rates on conventional mortgages. Jumbo rates usually run one-quarter to one-half of a percentage point higher, but lenders eager for wealthier customers are making deals.

In 2013, Wells Fargo and Bank of America cut minimum down payments to 15% from 20%; some competitors did too.

“It’s a good time to be a jumbo borrower,” says Guy Cecala, CEO of Inside Mortgage Finance.

Want a large loan?

Big banks have the best rates; you’ll need a 740 credit score or higher to snag them, says Keith Gumbinger of mortgage data provider HSH.

Currently, rates for a 30-year fixed jumbo are averaging 4.25%, compared to 4.35% for a conventional 30-year fixed-rate mortgage. For ultralow rates, check out adjustable-rate jumbos: Wells Fargo recently offered a five-year adjustable for 2.375%. Get an ARM, though, only if you expect to move on during the fixed period.

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