MORTGAGE LOAN BARGAIN?

By Robin Shapiro

Fannie Mae loan conforming limits have been increased to just under 1.1 million in high-cost areas. Loans above these limits are called “jumbos.” The rates on jumbos vary with supply and demand. Lately, jumbo rates have been .5% to .75% below loans for a 30-year fixed rate. Jumbo loans are one method to obtain a lower mortgage rate. 

Hybrid adjustable rate mortgages  (hybrid arms)  are fixed for the first three years, five years, seven years or 10 years, and the payments are amortized as if the loan was a regular 30-year fixed rate. After the initial fixed rate period, the rate adjusts versus an index with caps on how much it can change.

Rates on arms are about .5% below a 30-year fixed rate currently. A combination—a jumbo hybrid loan—can maximize the reduction in the mortgage rate. My friend just got 5.375% on a 10 year/1 year jumbo hybrid arm. That’s fixed at 5.375% for ten years. The monthly cost is $560/100k. He plans on selling or refinancing before the ten year period ends.

Palm Sunday is this Sunday, April 2. Good Friday is on April 7. Easter Sunday is April 9. Passover begins Wednesday evening April 5 and ends Thursday night April 13. No work is permitted on April 6, 7, 12 and 13 for the observant. Happy Holidays to all. Call me. Love, Robin.