Factors That Affect Jumbo Mortgage Rates - Home Loan Experts with Great Mortgage Rates Serving Colorado, Florida, Illinois, Indiana, Michigan, Minnesota, Tennessee and Wisconsin

Monday, November 11, 2013

Factors That Affect Jumbo Mortgage Rates

Jumbo mortgage rates are impacted by a variety of reasons. Banks will typically assess interest rate risk premiums for certain types of jumbo mortgage loans. As an example, an interest rate for a cash out mortgage loan will typically be higher than an interest rate charged for a mortgage obtained for purchasing a home. Below is a list of factors that will determine the interest rate that you will be charged on your jumbo mortgage loan:

Credit score: while a score of 740 will usually qualify for the best interest rates on conforming loans ($417,000) or less, some banks offer their lowest interest rates for borrowers with credit scores of 800 or higher

Loan to value: you typically need 20% down just to be approved for a jumbo mortgage loan; if you have equity/down payment of 40% or more, you will qualify for the lowest available interest rate

Loan type: purchase money mortgage loans (mortgages used to purchase new homes) have the lowest rates in today’s market

Property type: if you are planning on purchasing a condo, you will typically be charged higher rates than if you are purchasing a single family home

Occupancy type: jumbo mortgage rates are normally the lowest for primary residence mortgage loans; for jumbo mortgage loans, second homes carry a slight rate increase; many lenders do not even offer jumbo loans for investor purchases

Lock term: longer rate lock terms (i.e. 60 days, 90 days, 120 days) lead to higher interest rates

Escrows for taxes and insurance: normally, there is a slight rate increase (.125%) for a borrowers who want to pay taxes and insurance on their own

If you own or you are purchasing a home in Illinois, Indiana, Michigan, Minnesota or Wisconsin and you need a jumbo mortgage loan, please contact United Home Loans.


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