FAR Misses The Jumbo Mortgage Mark
June 9th, 2009 categories: Aventura, Real Estate News
The Florida Association of Realtors Early Bird News is typically a source of relevant and accurate industry news for Real Estate professionals and consumers alike. However, recently this publication has been the source of some misinformation that needs to be clarified.
On Friday June 5th Early Bird News included a link to a short article indicating that move up and luxury home buyers were holding off on purchasing homes “because they don’t want to pay jumbo mortgage rates“. If any buyer is not taking advantage of the incredible deals in Miami and Florida housing markets because they think jumbo rates are high then they are talking to the wrong mortgage banker.
Jumbo mortgage money is readily available and at rates that are below historic lows and in some instances even below conforming rates.
Here is a brief indication of current jumbo rates assuming loan amount greater than $1,000,000 with no points.
10% Down – 5/1 ARM 6.5%* 7/1 ARM – 6.75% 10/1 ARM – 6.875%
20% Down – 5/1 ARM 6.125% 7/1 ARM – 6.375% 10/1 ARM – 6.625%
35% Down – 5/1 ARM 4.75% 7/1 ARM – 5.125% 10/1 ARM – 6.00%
As you can see the amount of the down payment being made can have a significant impact on the rates that are available for qualified luxury home buyers but with credit score requirements as low as 680 and debt to income ratios as high as 50% many are finding it very easy to purchase a new home using a jumbo mortgage.
Why no fixed rates you ask…most buyers of luxury homes tend to be more financially savvy and typically don’t use fixed rate mortgages do to the significant interest rate premium one has to pay to get a fixed rate. That being said fixed rate jumbos are available however, taking into consideration the average lifespan of a mortgage and the cost versus benefit of fixed rates one can see that fixed rate jumbos are not beneficial.
