Buyers in the market for pricey homes will find it cheaper to find financing than their more budget-conscious counterparts, with rates on so-called jumbo mortgages dropping below those for regular mortgages for the very first time.
The average 30-year fixed-rate conforming mortgage was at 4.73 percent last week, compared to 4.71 percent for the average jumbo 30-year fixed-rate mortgage, according to data from the Mortgage Bankers Association seen by the Wall Street Journal.
Those in the know say this is a first. “In my 30-year career, I’ve never seen nonconforming loans priced below conforming loans,” Brad Blackwell, executive vice president at Wells Fargo WFC +0.27% Home Mortgage, told the newspaper.
The better rates on jumbo mortgages have led to change in strategy for homeowners and lenders.
“I’ve had situations where I’ve told clients, ‘You don’t need to borrow within the [conforming] limit. I can get you a lower rate if you borrow a little more,’ ” Rolan Shnayder, director of new-development lending at H.O.M.E. Mortgage Bankers in New York, told the Journal. [WSJ] – Hiten Samtani