From Premium to Discount on 30-Year Mortgages In the aftermath of the 2008 financial crash, funds for jumbo mortgages virtually dried up. At a time when rates on conventional, 30-year mortgages were fetching around 4.5%, jumbo rates were 6% or 6.5% — if you could find such products at all. Today, that premium and scarcity has been replaced by...Read More
From (Big) Premium to Discount Three years ago — give or take — there was a HUGE premium for a jumbo mortgage (over $417k in most markets) relative to a conforming one. As I recall, the spread was something like 150 basis points. Translation: when conforming rates were 4%, jumbo’s were at 5.5% — assuming...Read More
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...Read More
Stuck in Place A healthy housing market functions like a gigantic escalator. The bottom rungs are occupied by first-time Buyers. As they purchase entry-level homes, the Sellers of those homes (“Move-up Buyers”) typically buy larger homes, enabling Sellers of those homes to buy even bigger homes. And so on, and so on. One of the...Read More
Still Low (For Now) For months (years?), Realtors have been warning prospective home Buyers that today’s low rates (still around 5% for those with excellent credit) won’t last much longer. That’s based on a number of potent economic factors: –Trillions in economic stimulus pumped into the economy by the Fed and its potentially inflationary impact;...Read More
Why Such a Big Discount For Big Homes Needing Updating? Want a novel — but not at all far-fetched — (additional) explanation for why so many nicer, bigger homes are facing significant discounts in today’s market, especially ones that need significant updating? Keep reading. Far and away, there are three big reasons why such homes...Read More
