The gap between jumbo and conforming rates in Orange County widened to more than one percentage point this week, says Newspaper Chart Services.
The average jumbo rate with a one-point fee on a 30-year fixed mortgage was 7.3%. The jumbo rate applies to loans over $417,000. That compares to an average conforming rate on a 30-year fixed loan of 6.26%, including a one-point fee.
Here’s a table with the past four weeks:
| Date | Jumbo | Conforming | Gap |
|---|---|---|---|
| 2-Aug-07 | 6.700 | 6.333 | 0.367 |
| 9-Aug-07 | 6.830 | 6.299 | 0.531 |
| 16-Aug-07 | 7.110 | 6.337 | 0.773 |
| 23-Aug-07 | 7.300 | 6.262 | 1.038 |
I’ve been pricing a jumbo loan for myself at Countrywide just for the heck of it over the last 60 days. Here’s the situation:
A paper, perfect credit
20% down
No points
30 Year fixed, fully amortized
Jumbo amount
6/20/07 - Rate of 6.375%
8/13/07 - Rate of 6.750%
8/24/07 - Rate of 7.500%
Today the pricing would have worked out better to put me into a 1st and 2nd even though I have 20% down, with the first being conforming.
Wow. The monthly payment went up by almost 15% in 2 months, and that’s with good credit and 20% down.
Once the market corrects, you will see investor confidence rise again, people will start buying again and rates will go down.
But right now, investors are very weary on throwing away money to fuel irresponsible borrowing and lending. If the lenders don’t reign in the standards and buyers already have proven to be willing to overextend themselves, then someone has to cut the cord somewhere - and that someone happens to be those investors.
Decrease in investor confidence in home values in many areas such as OC is exactly what many people have predicted. This is not a surprise to most people, and as for the others, its simple denial. This kind of appreciation can’t be sustained forever, and to think it can is absolutely ludicrous. Let this correct and we’ll all be better for it.
BankRate, WAMU, 30 year Jumbo, 6.75 percent
WAMU cost is 1.25% at 1% the rate would be closer to 7% right in line with the rates Matt posted
Matt
What are You and the fellow Bloggers Over ther Smoking?
First, WEEKS ago this rate difference occurred- I am a Lender. The difference between Conforming and Jumbo has been this way for a while- Where Have You Been?
Secondly, I don’t know Where you get your info, BUT WAMU is Not at 6.75 for JUMBO- They are at 7.25% at 1 Pt for a 30 Day Lock.
Get with the Times and Accuracy or Don’t Put it on the Board.
Oh excuse me Mr. Lender , how do I know you’re a lender and how do we know your info is any better than anyone else’s? I’m quoting what was on the BANKRATE website today and WAMU is showing 0.25 points not 1.25. And don’t be a wise guy and tell anybody what they can and cannot be posting. OK Hotshot?
glad I’m not the only one ignotus lashes out at
I may disagree with what you say but I will defend to the death your right to say it. - Voltaire