Jumbo is a Bargain!

by Rod Sager

According to the latest statistics, Jumbo loans are actually priced better than conventional loans right now. Some sources suggest that this is the first time in history that has happened. Jumbo loans are loans that exceed the conventional limit which is usually $417,000 but can be higher in certain "expensive" markets. Conventional loans are typically bought by Fannie Mae or Freddie Mac. Jumbo mortgages are mostly held by private investors and it seems they are warming up to the idea of holding mortgage paper again.

If you find yourself in a position to buy a larger home in the $500,000 or more price range, now could be the best opportunity in your lifetime. Right now many markets are seeing price increases. Most of the activity has been in the entry level market and it seems to be spilling into the mid level as well. The high end market tends to trail the bottom so prices on the big homes are still pretty low compared to the peak in 2006-2007. Now that the private mortgage investors are feeling the love, Jumbo loans are very affordable. Maybe that big house in the country with the brand new six stall horse barn and covered arena is within your reach after all. Talk to your real estate professional about this amazing situation. These windows of opportunity often remain open for short periods. Maybe it is time to "pull the trigger".