Bringing Down The Cost Of A Jumbo Mortgage
For most locales across America, home prices have fallen 10% or more. And, with recent Fed rate cuts, interest rates on mortgages of $417,000 or less have sunk to their lowest levels in four years. Those with solid credit and at least a 20% down payment can lock in a rate of only 5.9% on a 30-year mortgage.
But times have not changed to the good for those homeowners needing a jumbo mortgage. That level of mortgage is for home loans of more than $417,000. Mortgage guarantors Fannie Mae and Freddie Mac are not permitted by law to purchase jumbo loans. And, investors have stopped buying bonds created from bundles of jumbo.
However, there is some positive news for those needing a jumbo mortgage. As part of the economic stimulus bill signed by President Bush last week, the limit for Fannie and Freddie mortgages will be temporarily raised from $417,000 to $729,750.
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