Jumbo Mortgages for 4.75%
The Federal Reserve anticipates that very low interest rates will be needed for an extended period.
–Fed Reserve Chairman Ben Bernanke
Mortgage interest rates have been so low for so long (2 years? 5 years?) that it’s no longer perceived as “new news” — but actually, it is.
Namely, jumbo mortgages (over $417k in most parts of the country) now carry an interest rate of 4.75% for qualified Buyers with 20% down.
Just two years ago, that number was well over 6% — and a hefty premium to what are called regular or “conforming” (non-jumbo) loans.
Exactly How “Extended?”
Meanwhile, rates on regular 30 year mortgages are drifting down into the mid-4% range — and ARM’s are in the 3%-plus range.
One example: a 10/1 ARM — fixed for the first 10 years, then adjustable annually thereafter — is now just 3.875%.
The implications: if you take Mr. Bernanke at his word . . . you could save a lot on your mortgage payments.
Of course, that’s also the case if you don’t expect to be in your current house for another decade.
P.S.: the foregoing drop in rates is such that even homeowners who just refinanced in the last year may be candidates to do so again.