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gzz.
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July 16, 2022 at 10:59 AM #23211July 16, 2022 at 3:41 PM #826368
svelte
Participanthttps://www.bankrate.com/mortgages/jumbo-rates-fall-below-conforming-rates/
“When 10-year Treasury yields rise, so too do the rates for mortgages that are being packaged into mortgage-backed securities,” says Greg McBride, Bankrate’s chief financial analyst. “Jumbo rates are less dependent on secondary market pricing because they aren’t packaged into mortgage-backed securities as often.”
What’s more, jumbo lenders tend to be quite picky about the creditworthiness of jumbo borrowers.
“The jumbo loans we are doing are all stronger borrowers – high FICO, lower debt to income and loan to value and high reserves,” says Jim Sahnger of C2 Financial Corp. in Jupiter, Florida.
July 16, 2022 at 9:40 PM #826369gzz
ParticipantWell “market forces” is kind of vague.
Why are jumbo loans relatively better than a year ago?
“ The jumbo loans we are doing are all stronger borrowers – high FICO, lower debt to income and loan to value and high reserves”
In aggregate, but the same borrower now can get a jumbo loan about .9% lower as opposed to the normal 0.3% higher. And the typical jumbo borrower has always been wealthier, higher score etc.
Well I will be putting in an offer that will require my first jumbo on Monday, hope I get it. Suburbia here I come!
July 17, 2022 at 9:46 AM #826370svelte
ParticipantSo I took the 15 extra seconds to do a quick google search and find what industry insiders say is the reason…something you could have done on your own.
You poo-poo it because you don’t like the answer.
Do your own google search and find an answer you like better.
July 17, 2022 at 1:12 PM #826371gzz
ParticipantThe explanations of what fuels the jumbo spread make sense, but not why it suddenly has blown out to record negative lows.
It has been slightly negative before, but never ~0.9.
“Average loan quality is higher on jumbos” is the worst explanation because the gap is roughly the same for the lowest most prime conventional borrowers.
One explanation that has changed with time is the GSE fees on conventional mortgages, which greatly increased 2009-2014. This outdated article is the best on this topic:
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