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Jumbo loans, which are what many New Yorkers who need financing rely on, are seeing their rates seesaw these days.
According to a report from The Real Deal via the Wall Street Journal, mortgage brokers are seeing rates vary by a couple of percentage points, unlike the typical tenth of a percentage point. One mortgage broker told the WSJ that he saw a 3.25 percent rate and a 5 percent rate.
Jumbo loans are intended for properties that are too expensive for conforming loans, which are capped by the Federal Housing Finance Agency for one-unit properties at $765,600 for expensive areas like NYC. So, if you need to borrow more, you would turn to a jumbo loan.
In July, jumbo rates went higher than those for traditional mortgages for the first time in five years, The Real Deal reported. The average rate for a jumbo loan last week was 3.41 percent, compared to 3.13 percent for a 30-year fixed-rate mortgage, as per the Mortgage Bankers Association’s weekly survey, according to the site.
Since the start of the pandemic, it’s been harder to get a jumbo loan. Fewer lenders are willing to offer them and lenders are also being more cautious, and some mortgage banks have tightened restrictions out of concerns then may not be able to resell the loans.
"Jumbo lenders are more conservative due to the liquidity threat—that is, borrowers suddenly losing their jobs," Jonathan Miller, president and CEO of appraisal firm Miller Samuel previously told Brick. "Therefore, they are offering a more conservative loan-to-value ratio, requiring higher credit scores, and not dropping mortgage rates anywhere near as much as the Federal Reserve hoped."
Jumbo financing is still available, but some borrowers have had to put more down than they were planning, Brittney Baldwin, vice president of National Cooperative Bank (a Brick sponsor), told Brick earlier this summer. If you’re preparing to buy in NYC and will need a mortgage—here are some tips for how to prep your finances.
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