Jumbo Mortgage Austin Blog

30 Year fixed jumbo mortgages continue to have no appetite of purchase on the secondary market. If banks still are able to accommodate such a jumbo loan, their pricing normally starts in the 8’s with at least 1 discount point used to get to this rate. I work with one bank which offers rates in the 7’s if the jumbo mortgage meets the following conditions. The mortgage must be less than 850K and the down payment must be at least 15%. If you desire to stay in your home longer than 7 years this would be the very best option for you. There are still a hand full of banks which have great jumbo programs on 3,5 and 7 year adjustable mortgages. If you are looking for stability in mortgage the fixed 30 year mortgage is the best.

Josh Kohl

I am working with client who is refinancing her jumbo mortgage and pulling out cash to pay off her Hummer and Corvette with cashout from her mortgage. The client is currently on a 6.9 fixed rate and wants to refinance to a 5/1 ARM @ 6.8% with no prepayment penalty. Her goal is include the debts of both cars into the mortgage refinace. This is great loan because she plans to sell the home in less than 5 years and to include the two cars as part of the refinance and this will save her $1200 a month. Please contact us with any jumbo mortgage questions.

Josh Kohl

I am working on a Jumbo mortgage purchase for a Gentleman who is buying a 1,400,000 dollar home. He is making a 400,001 down payment and wants a 7/1 Interest Only Adjustable mortgage. He is qualified full documentation and his mortgage rate is 6.5%. His mortgage payment will be 5,411/month. In the current mortgage environment it is important to get in touch with a jumbo mortgage planner who knows which banks offer the best jumbo mortgage rates. Please contact us with any rate or guideline questions in regards to jumbo mortgages.

Josh Kohl

Hello potential clients of Texas. I wanted to write a post about Jumbo mortgage rates, why I think you should go with my company and how brokers make their money. First of all Jumbo mortgages are a completely different type of mortgage than a conforming mortgage. They are non conforming mortgage meaning they exceed 417K. This poses a problem with a majority of banks now because they are becoming increasingly difficult to sell on the secondary market. Because of this, rates are higher and the costs are higher with your general bank. This is all fine and dandy because there are still banks out there who desire these particular loans. For example I work with over 40 banks and 6 of them fit this mold. Last year the number would have been closer to 30. The banks with the most aggressive Jumbo products have portfolio lending which means they actually hold on to the loan and do not sell the financial instrument on the secondary market. The trick for the mortgage planner is to know which bank to work with in terms of the loan amount, loan to value and credit score. This seems easy, but I can assure from researching these loans for years is not. The key is not only to partner up with someone who has access to many lenders but knows exactly which lender is good at what and keeps track of which lender might be trying to buy the market that week or that month. Jumbo mortgage applicants generally have a pretty keen financial eye, with the exception of some athletes and entertainers. Thus as a consumer its your job to find the perfect deal which will consist of lowest rate and lowest closing costs. Working with someone who does their research is also a big plus. Your ideal loan officer will be on 100% split and have low overhead. They can charge less and still make the same money. Do you think two mortgage guys who have local Austin radio shows on 1370 AM have low overhead? Now here comes the fun part how brokers make their money. Brokers make their money one of two ways, on the front or on the back. On the front brokers make money in origination. They may also charger a broker fee, but this most of the time is a legitimate fee that goes to the actual broker of the company. On the back of the loan the broker makes (Yield Spread Premium). To simplify this, it means the mortgage planner raises the rate above par in order to make more $. Par rate reflects the lowest amount of YSP before there is an actual cost to the broker for rate. Now obviously the process takes around a month from start to finish and no one expects some to work for free so money has to be made somewhere. When a clients sees a Good Faith Estimate with no points they assume they are getting a great deal, which they may. In reality the mortgage planner is making all their money by charging you a higher rate. Truth be told, with a Jumbo mortgage an eighth or quarter of point has a great effect on your monthly payments due to the sheer size of the amount financed. Here is an example of one the best Jumbo mortgage lenders rates. US Bank with a 15% down payment has some of the best rates in our country. They do not charge for interest only (.25), waiving escrows (.25) and big one, they do not charge mortgage insurance. They are one of two banks that has such an aggressive Jumbo program. I would tell you about the other but I cant give away all my secrets. Here are US Banks par rates as of today. This is based on a credit score of 720 and loan amount 750K or less.

3/1 ARM 5.7%

5/1 ARM 6.5%

15 Year Fixed 6.65%

20 Year Fixed 6.7%

30 Year Fixed 7.15%

On a deal like this 1 point would be charged. Keep in mind if you factor in the savings of the escrow waiver and interest only if you choose these options then you are getting a par rate with half a point on the front. Also you have no mortgage insurance, which will save you at least a couple of hundred dollars a month alone. Banks offer what I would say are pretty good deal up to 3 million dollars. Be prepared for at least a 10% down payment. Your credit score is very important. There are big hits for scores under 720. If you have to nice home and your credit score is a 650 be prepared for higher rate and larger down payment. As always if you have any questions about guidelines or rates, please send me an email josh@jkohlmortgages.com.

Josh Kohl

Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!