Ed's Blog

The interest rates on the newly coined “Conforming Jumbo Loans” have plummeted, and the calls have been pouring in. Let me explain:

Just a few weeks ago the interest rates on Conforming Jumbo Loans were nearly a full percentage point higher than the interest rates on Conforming Loans. Example: a Conforming Loan (under $417K) was carrying an interest rate of 5.75%. By contrast, Conforming Jumbo Loans were carrying an interest rate of nearly 6.75%. That’s a big discrepancy.

But, that is water under the bridge for now. Conforming Jumbo (above $417K but below $729,500K) interest rates are now only .25% higher than Conforming Loans. Example: a conforming loan is at 5.75%, the Conforming Jumbo is now right around 6%.

And one last bit of good news. Freddie Mac (one of the two Government Sponsored Entities or GSE’s) has just announced that it would buy more Conforming Jumbo loans. That’s one small step for homeowners and buyers, and one giant leap towards a return to stability in the housing market.

Stay tuned!