Unlike conforming mortgage rates, which typically differ by.25 to.5 percent between competitors, jumbo mortgage rates can vary largely from one lender to the next.
According to Freddie Mac's weekly survey
of conforming mortgage rates, interest rates on 30 - year fixed - rate mortgages edged up slightly this week, averaging 4.21 % up over last week's 4.19 %.
Unlike conforming mortgage rates, which typically differ by.25 to.5 percent between competitors, jumbo mortgage rates can vary largely from one lender to the next.
Fannie Mae bonds are linked to
conforming mortgage rates and Ginnie Mae bonds are linked to FHA and VA mortgage rates.
Fannie Mae mortgage bonds are tied to
conforming mortgage rates.
While rates can change, currently FHA rates are usually a little lower than
conforming mortgage rates.
Fannie Mae mortgage bonds are tied to
conforming mortgage rates.
We still have a pretty significant spread between
the conforming mortgage rate and the jumbo mortgage rate.
The next factor that causes jumbo mortgage rates to be higher than
conforming mortgage rates is risk.
Conversely, since fewer people can afford more expensive homes that have a mortgage amount over $ 417,000 there are fewer jumbo loans and thus with a smaller supply you will have higher jumbo mortgage rates as compared to
conforming mortgage rates.
There are really three fundamental reasons why jumbo mortgage rates are a little higher than
conforming mortgage rates.
We will look at each fundamental reason and how it influences
both conforming mortgage rates and jumbo mortgage rates.
The final factor that makes jumbo mortgage rates higher than
conforming mortgage rates is the secondary market.
They are supply / demand, risk, and the use of secondary markets which all determine
both conforming mortgage rates and jumbo mortgage rates.
In conclusion even though mortgage rates are really low right now jumbo mortgage rates for the above reasons will always be slightly higher to
conforming mortgage rates.
Supply / demand as may of you learned in Economics 101 is what drives the price of any product, commodity, or service including both
conforming mortgage rates and jumbo mortgage rates.
In recent years, jumbo loan mortgage rates have actually been running a bit lower than
conforming mortgage rates, because the borrowers are seen as more financially secure.