The fallout from the credit crunch and housing bubble have had a sharp impact on home owners who have jumbo loans. The marketplace for loans over the agency limit of $417,000 has been very problematic since August of 2007. Traditionally jumbo loans have been priced only slightly higher than a conventional mortgage, but this has changed rapidly due to the deterioration of the secondary marketplace. Many lenders are no longer offering jumbo loans and if
they do they are priced as much as two percent higher than a conventional mortgage, which can amount to payments thousands of dollars higher than what you may have been able to secure just six months ago. So where does that leave you if you are a home owner with a mortgage balance over the conforming limit? One option is to try and structure a first and second mortgage, keeping your first loan at the $417,000 limit. This option, commonly referred to as a piggyback mortgage will be harder to find in the marketplace with many lenders eliminating second mortgages and equity loans. Your best bet in refinancing a jumbo loan is to try and find a lender or bank that portfolios their mortgage. What this means is that they do not try to sell the mortgage in the secondary market and hold onto the loans making money off of the interest and servicing of the mortgage. You will probably need to contact local banks or credit unions to find lenders who operate under this business model, but this could save you thousands of dollars in interest over a years time.
|
 
|