Banks courting high-end buyers with cheaper jumbo mortgages

New York /
Jul.July 03, 2013 09:30 AM
 

While rates for conventional mortgages saw their greatest spike in two decades last month, financing costs for high-end homes are becoming a relative bargain, as banks such as Wells Fargo and JPMorgan Chase offer jumbo mortgages at low rates to nab high-end clients, Bloomberg News reported.

The extra cost of 30-year fixed jumbo loans reached a six-year low of 0.16 percentage point last month, according to data from HSH.com reviewed by Bloomberg News. Bigger adjustable-rate mortgages with payments that can rise after five years ended last week 0.09 percentage point cheaper.

“Lately, our jumbos are either in line with conforming or better,” Karen Mayfield, the mortgage banking national sales manager at San Francisco-based Bank of the West, told Bloomberg News.

Jumbo loans – which are loans larger than those allowed in government-supported programs (up to $729,750 for single-family properties in high-cost areas such as New York) – are getting relatively cheaper because they remain on the bank’s book, as opposed to being spun off into mortgage-backed securities, Paul Miller, a capital markets analyst, told Bloomberg News.

“The banks are awash in liquidity, and they are looking for ways to make good loans,” David Hilder, an analyst at New York-based Drexel Hamilton, told Bloomberg News. [Bloomberg News] Hiten Samtani


Related Articles

arrow_forward_ios
1277 East 14th Street, 45-57 Davis Street and 575 Grand Street (StreetEasy, Google Maps, iStock)
Mighty Midwood bookends top outer-borough loans
Mighty Midwood bookends top outer-borough loans
From left: Black Knight CEO Anthony Jabbour and Intercontinental Exchange CEO Jeffrey Sprecher (Black Knight, Intercontinental Exchange, iStock)
Intercontinental Exchange expands mortgage play with $13B Black Knight buy
Intercontinental Exchange expands mortgage play with $13B Black Knight buy
Baruch Singer with 1508 Coney Island Avenue (Schnakel) Midwood, 92M
Humdinger: Baruch Singer lands $92M for Midwood spec office
Humdinger: Baruch Singer lands $92M for Midwood spec office
 Extell’s Gary Barnett with Times Square Hard Rock Hotel (iStock)
Gary Barnett’s Extell repeats as Manhattan’s top borrower
Gary Barnett’s Extell repeats as Manhattan’s top borrower
A photo illustration including a rendering of Third at Bankside in Mott Haven (top left), the Cunningham apartment complex in Queens Village (bottom left), and 47-05 Center Boulevard in Long Island City (right) (Google Maps, LoopNet, iStock)
Brookfield’s $438M Bronx deal tops outer-borough loans
Brookfield’s $438M Bronx deal tops outer-borough loans
Nima Ghamsari, co-founder, Blend Labs (Blend Labs, iStock)
Mortgage tech firm lays off 200 as rates surge, industry slumps
Mortgage tech firm lays off 200 as rates surge, industry slumps
From left: Richard Benson-Armer, chief people, performance and culture officer, Better.com; Vishal Garg, CEO, Better.com (Activant Capital, Better.com, iStock/Photo Illustration by Steven Dilakian for The Real Deal)
“Prudent and necessary”: More layoffs at Better.com
“Prudent and necessary”: More layoffs at Better.com
Movement Mortgage CEO Casey Crawford (Movement Mortgage, iStock)
More mortgage lenders lay off staff as rates rise, applications slow
More mortgage lenders lay off staff as rates rise, applications slow
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...