Arizona Mortgage Team » Jumbo Loans

Jumbo Loans in Arizona: Good Deals?

Justin McHood — Tue, 08 Feb 2011 21:08:57 +0000

Jumbo Loans in Arizona: Good Deals? is a post from: Arizona Mortgage Team

Recently, we had a discussion with the Branch Manager at Academy Mortgage in Mesa, Kevin Kosisky. During this short excerpt we discussed jumbo loans and what the current jumbo mortgage market was like here in Arizona.

From the video:

Kevin, can you tell us what a jumbo loan is?
A jumbo loan is a loan that the loan amount is over $417,000 and that is throughout the country.

And are they available in Arizona?
Yes, they are available and they require at least 20% down and we have been doing quite a few of them in Arizona.

What are the general guidelines for jumbo loans in Arizona?
Jumbo loans have the same basic guidelines as a conventional loan, a lot of times they are scrutinized a little more beccause the loan amount it higher, you might have two underwriting layers but otherwise it is the same type of qualifications.

Would the guidelines be different for California jumbo loans vs Arizona jumbo loans?
No they wouldn’t – the guidelines are the same, the only difference may be the requirement for down payment depending on the region that you are in.

How do the interest rates on Jumbo loans compare vs conventional loan rates?
There is a misconception that jumbo rates are much higher than conventional rates but they are not. Jumbo rates are about the same as the conventional rates right now – and you can actually get some really good deals on jumbo loan rates with the jumbo ARMs.

Have questions about jumbo loans in Arizona? Be sure to contact Kevin and his team for more answers.

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Jumbo Loan Rates Drop To 2003 Levels

Justin McHood — Sat, 10 Jul 2010 18:17:39 +0000

Jumbo Loan Rates Drop To 2003 Levels is a post from: Arizona Mortgage Team

Since the credit crunch that began a couple of years ago, jumbo loans have been harder to find. Many of the lenders who used to specialize in jumbo loan financing are no longer around – and many of the larger lenders have tightened their guidelines – or just stopped lending money for jumbo loans all together.

But within the last few months, it seems that there have been a handful of lenders who are now offering jumbo loan financing – and just in time… interest rates on jumbo loans has dropped to levels not seen since 2003.

Courtesy WSJ

According to the WSJ:

Just a year ago, the average rate on a 30-year jumbo mortgage—a loan of more than $729,750 not backed by government-sponsored agencies Fannie Mae or Freddie Mac—was 6.86%, according to Greg McBride, a senior financial analyst at Bankrate.com. Now it is 5.48%—a rate that rivals those available during the height of the credit bonanza.

“In just the past couple of months, jumbo loans have really started to be competitively priced,” says Keith Gumbinger of HSH Associates, a publisher of consumer-loan information.

The recent low rates on jumbo loans has caused an uptick in refinancing activity – with some jumbo lenders reporting that jumbo refinancing up as much as 50% vs. what it was last year.

Refinancing a Jumbo Loan: Big Savings

Due to the large loan amounts of a jumbo loan, when you lower the interest rate by refinancing your jumbo loan, you can save a great deal of money. Dropping your interest rate just a single percentage point can add up to over a thousand dollars – on a fairly “regular” jumbo loan product.

A simple example pointed out by the WSJ was where a homeowner with a 30-year fixed-rate $800,000 mortgage at 6.86% pays $5,247 a month. If he were to refinance at 5%, his monthly payments would be reduced by $952.

Jumbo Lenders in Arizona: We Are Here

Working with the right loan officer who knows what lenders are offering what terms on jumbo loan financing here in Arizona is key — there are a handful of different lenders offering jumbo financing and each one has different guidelines.

Contact us today to see if it is in your best financial interest to refinance your jumbo home loan here in Arizona — or anywhere else!

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Jumbo Loans: Do They Still Exist?

Corbin Olsen — Wed, 03 Feb 2010 22:06:53 +0000

Jumbo Loans: Do They Still Exist? is a post from: Arizona Mortgage Team

When the credit crisis hit jumbo loans was one of the first markets in mortgage financing to get hit hard. Banks pulled their jumbo loan programs off the market in a hurry and it had a big impact on the demand for homes over $500,000.

There is not much of a secondary market for jumbo loans or no one to buy up the securities they are pooled into. That means the initial investor that underwrites and buys the loan is typically the servicer. The jumbo loan market has started to come back and there are great loans out there at very competitive rates.

What is a Jumbo Loan?
A jumbo loan is a loan amount typically above $417,000 or above the Fannie Mae/Freddie Mac limit. Fannie Mae/Freddie Mac is currently allowing loan amounts up to $729,000 in some high cost areas but not for us here in Arizona.

What can I expect when qualifying for a jumbo loan?

Higher Rates: You can expect to pay higher rates than for a conforming loan. Because there is no secondary market to securitize these loans you can expect higher rates. Once your loan amount goes over 1 million expect even higher rates. Don’t let this scare you away; you can still get rates in the mid 4’s for some great ARM products. There are still plenty of interest only loans available too.
More money down/ more equity: Unlike an FHA loan, you can expect to make a larger down payment or have more equity in your home for a refinance. Most jumbo loans are requiring a 20% to 30% down payment depending on loan amount, credit score and other factors.
Higher reserve requirements: Banks want to see that after closing you have a good cushion of liquid reserves and that you have access to those reserves should you have a loss in income or some other hardship.
Tighter credit restrictions: Banks want to see higher credit scores and longer credit histories. Typically over a 700 score is acceptable, but to get the best rate you will want a score over 740.

First Mortgage Line of Credit
Another product I wanted to mention that recently came back is the first mortgage line of credit. This is not specific to just jumbo loans but it does allow for loan amount up to $2.5 million. The index is the 1 month Libor which is currently about .239. This is a great index for a line of credit and add your margin of about 3.00% and you will be paying about 3.5% on a jumbo loan!

Because it is a line of credit it has great flexibility to draw and pay down as you please and you pay simple interest which can mean less interest over the life of the loan. This loan alone deserves its own post but I will stop there for now.

When thinking about jumbo loans, be aware that as long as you are working with loan officers who know what they are doing… there are financing options available.

And some of the best deals on houses right now are for homes over $500,000.

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Jumbo Mortgage Loans: The State Of The Market

Justin McHood — Thu, 14 Jan 2010 17:26:17 +0000

Jumbo Mortgage Loans: The State Of The Market is a post from: Arizona Mortgage Team

One of the bigger jumbo loan companies was passing out fliers in the office touting that they are actively lending money for jumbo loans and I thought I would share some of the requirements to getting a jumbo loan in today’s world (for this one lender):

Jumbo Loans In Arizona Highlights

No HVCC requirements when dealing with the appraisal process
Maximum CLTV is 75%
Loan amounts up to $1.5 million
If property was listed for sale, must be off the MLS for one day
Full documentation required
Credit score minimums are generally 700 for all jumbo loans
Short payoff refinances are available on a case by case basis

Interest rates for jumbo loans under 900k are currently in the 6% range for a 30 year fixed rate jumbo loan.

True, this is only one jumbo loan lender, but if you are in the market for a jumbo loan — now you can have a general idea of what to expect.

Oh, and one more thing — although we can close loans in 10 days when we do them in house, we don’t do jumbo loans in house so expect it to take longer than 10 days to get your loan closed when getting with a jumbo loan.

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Arizona Jumbo Loans: 3 Common Questions

Justin McHood — Sun, 23 Aug 2009 18:51:17 +0000

Arizona Jumbo Loans: 3 Common Questions is a post from: Arizona Mortgage Team

Jumbo Mortgages: What Are They?

A “jumbo” mortgage is any mortgage that has a principal amount over the “conforming” loan limit. In Maricopa County, the conforming loan limit is $417,000 – and it changes from time to time (either up or down). A conforming mortgage is one that the government sponsored enterprises (GSE’s) of Fannie Mae and Freddie Mac are authorized to purchase.

Why Are Jumbo Mortgages Harder To Get?

The reason that jumbo mortgages are “harder” to get than FHA or conforming loans is because there is no government sponsored enterprise that is authorized to buy them – so it is up to private investors to buy them. The private investors who buy, hold and service the jumbo mortgages are usually large lenders such as US Bank, ING, Bank of America, etc. The term “private investor” doesn’t mean your neighbor down the street. Usually.

Why Do Jumbo Mortgages Have Higher Rates Than Conforming Loans?

Jumbo mortgage loans have higher risks associated with them for the investor than conforming loans Jumbo mortgage loans are a higher risk for lenders / investors. This is because if a jumbo mortgage defaults, it is harder to sell a higher priced home without deeply discounting the price. The combination of the fact that there is no ability for the government sponsored enterprise to buy the loan from the investor and the fact that it is more difficult to sell the underlying asset in the even there is a default results in higher rates than conforming loans.

Still have questions about Arizona Jumbo Mortgage Loans? Just let us know.

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Arizona Mortgage Team » Jumbo Loans

Jumbo Loans in Arizona: Good Deals?

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