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Jumbo Loans – A Fragile Market?

There have been many discussions circulating the topic of jumbo loan rates, and jumbo mortgage rates. Some are saying that they will soon be a thing of the past, while others believe they hold a prominent position in the future of the industry. But they can’t both be right, so how do you make your mind up?

Firstly, what is a jumbo loan rate? These types of mortgages are used so that people can purchase high priced homes, which need loans larger than normal. The jumbo mortgage rate is a convenient method but will charge a higher interest rate. And with the economy still changing each year, this rate could vary.

Though some believe that these Jumbo mortgage rates are great, it’s important to remember that bigger isn’t always better. Though in recent years the jumbo loan rates are starting to see a comeback, the market is still fragile and anyone that chooses to use them must play their cards right, and keep up with market changes.

But home prices everywhere have seen a decrease in price, this is a fact. If you look at the lower rates and lower home prices, it means that you can have more room to save. But it’s the high end home owners who have the control. If they are looking for a new home, and have good credit, they could potentially get a jumbo rate with a 0.7 to 1% origination fee.

A large percentage of people prefer a 15 year jumbo rate and these are currently at a rate of 4.500%. They like this particular rate because of the short mortgage period and the sum of interest that can be saved. More often than not, if you compare terms and payments, the difference in the two is not a good enough option to take the longer term.

If you’re in a good financial position and don’t need to take risks then a low mortgage rate on a jumbo is possible. There are some in the region of 3.375% but the jumbo 5/1 ARM is a perfect alternative to people that know they won’t be staying in the same location for too long. It is all about your situation and keeping an eye on the market to be totally sure what is right for you.