Posted To: MND NewsWire

For many years homebuyers looking for homes priced above entry level employed every device they could to keep their loan amount below whatever might be the current limit for conforming (Fannie Mae, Freddie Mac) loans. It might mean determining between the purchase of two similarly priced homes if only one squeaked by under the limit. Buyers came up with larger down payments, dipping more deeply into savings, hitting up the bank of mom and dad, or employing piggy-back second mortgages. Why? Because a jumbo loan would almost always have a higher interest rate than a conforming loan. That higher monthly payment could even mean the difference between qualifying for the loan or not. However, starting in 2013 the spread between a conforming and a jumbo loan began to narrow, and today’s jumbo loans…(read more)

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Source: Mortgage News Daily