It’s a great time to upgrade to a jumbo loan.
Jumbo mortgage activity is booming. The volume of jumbo mortgages – loans above $417,000 in most places and $625,000 in some high-priced areas – reached an estimated $160 billion in the first six months of 2015 – 36 percent higher year-to-year, according to Inside Mortgage Finance.
Still-low interest rates and a strong spring home-buying season helped fuel the growth, says Guy Cecala, publisher of Inside Mortgage Finance. Also, lenders loosened up credit guidelines somewhat, which also helped the jumbo market grow.
In the first half of the year, jumbo mortgages comprised about 20 percent of all mortgage originations, marking a comeback to prerecession levels, Cecala says.
“The coastal markets are appreciating at a larger clip,” says Bill Banfield, vice president of Quicken Loans. Indeed, Total Mortgage Services, which lends in 34 states, says its hottest jumbo markets for home purchases are centered in the Carolinas, California, Connecticut and Florida.
Even if mortgage rates rise – as they’re predicted to soon do – jumbo volume should remain healthy since rate increases don’t typically derail high-end borrowers who have significant assets and cash reserves, Cecala says.
Source: “Jumbo-Loan Market Remains Strong in First Half of 2015,” The Wall Street Journal (July 22, 2015)
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