Although mortgage rates have been rising to levels not seen for two years, lenders are now offering rates near and sometimes lower than interest rates for conforming loans. Here in Orange County, Jumbo loans are defined as mortgages over $625,000. This is an unprecedented situation, because jumbos historically have come at a premium.
You may wonder why is this the case? Well, the improving economy and real estate market have heated up the competition between the lenders to make jumbo mortgages, which are too big to be backed by Freddie Mac or Fannie Mae. This is great news for most people looking to get into the real estate market in Southern Orange County. The spread between Jumbo loans and conforming loans (Freddie Mac/Fannie Mae) had increased to almost 2% after the financial system collapsed in 2008. Today, the Jumbos are being made available at approximately the same rate or even less!
I did not want to list specific numbers in this post because these numbers change on a daily basis and are depending on your personal situation. Having said that, it is great news and shows that the real estate market has further room to grow.
Happy house hunting.
This is indeed great news!