4.25% 30 Year Fixed Rate
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Program Rate APR
30-Yr fixed 4.750 % 0.7 to 1
15-Yr fixed 3.750 % 0.7 to 1
5/1 ARM 3.125 % 0.7 to 1
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Jumbo Mortgage – Edge Lower

A mortgage is said to be a jumbo mortgage if the amount to be borrowed is above the regular mortgage limit. This means that the borrower is seeking a mortgage over $417,000. Those who are searching for this type of mortgage will find that jumbo mortgage rates will be higher than for regular mortgages.

The Cause of the Housing Bubble

The belief has been that sub-prime mortgages were the main reason the housing bubble burst. Now other contributors are believed to have helped to cause the current housing crisis the country is experiencing. A large part of the responsibility has gone to those who have jumbo mortgages, because these homeowners have decided to walk away from their homes that are underwater more often than other homeowners have.

Jumbo Mortgages Raise a Lender’s Risk

Jumbo mortgage rates are higher than for mortgages of lesser value, because the banks are assuming a greater amount of risk when they lend such large sums of money to people. Jumbo mortgages are needed for highly expensive, luxury houses which, in the current economy, are even harder to sell than houses of lesser value. In the event of a default, the lenders will have these assets on their books for a longer amount of time.

Current Mortgage Rates

Currently, jumbo mortgage rates are in the 5.00 percent range for a 30-year fixed loan while regular fixed mortgage rates are at a lower level. The 30-year Fixed Rate Mortgage (FRM) is equal to 4.66 percent. Similarly, for a 15-year FRM borrowers can expect to find a rate of 3.80 percent. The adjustable rate mortgage (ARM) is currently at a level of 3.27 percent.

The Meaning of Current Fixed Mortgage Rates

To have current fixed mortgage rates means that people will be paying the same amount in interest every month no matter the length of the loan. As homeowners are making these payments over the years, the principle they owe on the loan decreases, and they see the amount of equity in their houses increase. For people who believe they will want to stay in their homes for several years, this is a good deal for them.

The benefit of a fixed rate is that people develop equity in their largest asset, their houses. But the mortgage must not be more than they can afford, or else more and more homeowners become statistics as those who have defaulted on their loans.