Today's mortgage rates remain historically low, with 30-Year Fixed-rate loans at under 5% interest rates.
Mortgage News Daily is reporting a slight increase in the best available interest rates to 4.94% for a 30-Year Fixed-Rate mortgage. The national average is at 5.01% interest with 0.7 points. The 15-Year Fixed-rate mortgage loans have a national average rate of 4.40% interest with 0.7 points. The best available rate for a 15-Year Fixed-rate loan is 4.26%.
Jumbo mortgage rates are typically higher than conforming mortgage rates. Mortgage News Daily says that the best available interest rates today on a 30-Year Fixed-rate jumbo loan is 6.38% today.
Fannie Mae and Freddie Mac set the levels for jumbo loans. In general, any mortgage loan above $417,000 is a jumbo loan. In higher-cost housing markets such as Boston, New York City, Hawaii and Washington, D.C. jumbo loans are required for borrowers needing $729,750 or above. Just like FHA-loan limits, jumbo loan limits are set on a sliding scale according to the local housing market.
Jumbo mortgage loan interest rates generally run from one-half percent to one point or more higher than the interest rates for conforming loans. The loans carry a higher risk because of the potential for greater losses for the lender, but the main reason is that fewer investors are interested in purchasing these loans on the secondary market. Investors prefer to purchase smaller loans which carry less risk of large losses.
Homebuyers who need to borrow large amounts of money may find qualifying for a jumbo loan to be a little bit harder than for conventional financing. Borrowers need a strong credit history, a low debt-to-income ratio and a solid, demonstrated income pattern.
Some lenders may be willing to qualify borrowers for two loans for a home purchase in order to avoid the higher mortgage rate of a jumbo loan. While the second loan may have a higher interest rate than the first loan, borrowers may find that they can keep that loan to a smaller amount and pay it off as quickly as possible. This method can save the homeowners thousands of dollars in interest during the length of the mortgage loan.
Written by Michele Lerner
HULIQ.com
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