Giant mortgage rates slide in a divided market
The average rate on a 30-year jumbo mortgage fell to 3.35% this week, although interest rates on other loans have held steady or increased. The fall of the jumbo means that high value-added loan holders have an advantage when it comes to refinancing or getting a new mortgage these days, although rates remain fairly favorable across the board.
A jumbo mortgage, also known as a non-conforming loan, is one that exceeds the maximum value of what can be sold to Fannie Mae or Freddie Mac. In most parts of the country, that limit is $ 548,250 this year, but the threshold jumps to $ 822,375 in more expensive areas.
The need for a jumbo mortgage is determined by the amount of financing required for your transaction, not the sale price or the total value of a home. You could get a conforming loan on a multi-million dollar property if your down payment or equity makes up the difference between the price and the threshold of the giant mortgage.
Mortgage rates have fluctuated over the past few weeks, and most experts expect them to tend to rise as the recovery from the coronavirus continues and life slowly returns to normal. Most industry watchers expect mortgage rates to end the year higher, even if they remain low by historical standards.
In the near term, experts in the Bankrate Weekly Poll are divided over the direction of rates in the coming week, though most expect them to come down.
“Despite the underlying concern about inflation, the point is that the Fed is flooding the markets with liquidity,” said Dick Lepre, loan officer at RPM Mortgage, Inc. in Alamo, Calif. “In effect, the Fed is buying any Treasury debt that’s for sale. This results in lower returns. “