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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 – The Refinance

There were several considerations that I needed to take into account when I was considering embarking on refinancing the jumbo loan rate on my primary residence. These are challenging economic times. Many of my colleagues had experienced a sizable loss in income or their credit rating has suffered. I needed to personally address both of these issues before I commenced shopping for great jumbo loan rates. As I began contacting mortgage lenders, I took detailed notes about the different rates and programs available in the jumbo loan market.

In order to refinance mortgage interest rates, there are a number of closing costs and mortgage lender fees to take into account. These costs can run into the thousands of dollars. Because some of these fees, including origination fees and points, are based on the size of the loan, jumbo loans necessitate even higher closing costs than standard loans. A jumbo loan is defined as a mortgage loan of $417,000 or higher. Jumbo loan rates themselves are higher than conforming loan rates because of the higher risk profile of such large mortgage loans for banks.

At a meeting with my mortgage broker, she told me that in order to get my jumbo refinance loan approved, I would have to document the last two years of my income, including tax returns, bank statements and potentially investment accounts. Additionally, I would have to score 740 or higher on my credit report. I was quite confident that my credit score was fine, and I had two years of tax returns documenting my income easily accessible. So, I began to inquire about the refinance mortgage interest rates that were available for jumbo size loans in my area.

The interest rates on a thirty-year fixed rate loan were quite competitive and much lower than my current 7.75% loan that I took out when I purchased the home. However, I would still be required to pay almost $8,000 in origination fees, points, title insurance and mortgage insurance among other closing costs. In evaluating whether or not to continue with refinancing my jumbo mortgage loan, I had to take into account the amount of time that it would take for me to recoup my closing costs with a lower monthly housing payment. Because I knew that I planned to stay in my home for at least ten more years, the 5.4 years that it would take to break even and then start saving money was worth the time, effort and cost of refinancing my jumbo mortgage.