Jumbo Loans Back in Style?

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Posted To: MND NewsWire

Taking out a mortgage with an origination balance higher than whatever the conventional loan limit was at the time used to be an expensive proposition. Home buyers and refinancers had an incentive to do whatever they could - higher down payments, piggy back second mortgages - to get their loan under that conventional limit in order to reap the benefits of lower borrowing costs. However, as Archana Prahan writes in the CoreLogic Insights Blog, since mid-2013 a jumbo loan has had lower borrower costs than a conforming loan, currently defined as one with a balance at or under $453,100. In the first quarter of 2018 that differential averaged 33 basis points (bps). As Figure 1 shows, conforming loans were cheaper during the period from the second quarter of 2007 to the first quarter of 2013, (blue...(read more)

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Source: http://www.mortgagen...

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