Jumbo loans are now cheaper than traditional ones
The difference is so small that it's almost meaningless, but lending executives are still surprised at how low the rates are.
But that's all changed. Now, for the first time ever, it's cheaper to get a jumbo loan than a traditional one, The Wall Street Journal reports. It's a striking turn of events that has surprised even the most seasoned lending executives.
"In my 30-year career, I've never seen nonconforming loans priced below conforming loans," Walls Fargo (WFC) mortgage executive Brad Blackwell told The Journal.
The difference is so small that it's almost meaningless. The average rate for a traditional, or conforming, 30-year loan was 4.73% last week, The Journal reports. But the rate for the average jumbo 30-year loan was 4.71%. Still, the fact that these two rates are even close at all is shocking for some.
Why the renewed interest? Mainly because banks have a lot of cash right now, with more deposits than loans. They want to do something with that money, and jumbo loans are a safe and stable option.
And jumbo borrowers are usually wealthier than traditional borrowers. That means banks can take advantage of that relationship to sell them credit cards or brokerage accounts, The Journal reports.
The country's wealthy bounced back earlier in the recovery, and sales of properties between $750,000 and $1 million rose nearly 40% in February from a year earlier, Reuters reports. Sales of properties valued at over $1 million rose some 25%.
- Female doctors make $56,000 less than male MDs
- Is 'middle class' a Marxist term?
- Climbing college enrollment does an about-face
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The stock market ended the holiday-shortened week on a mixed note as the Dow Jones Industrial Average shed 0.1%, while the S&P 500 added 0.1% with seven sectors posting gains.
Equity indices faced an uphill climb from the opening bell after disappointing quarterly results from Google (GOOG 536.10, -20.44) and IBM (IBM 190.04, -6.36) weighed on the early sentiment. Google reported earnings $0.15 below the Capital IQ consensus estimate on revenue of $15.42 ... More
More Market News
Serious issues like drought and the deterioration of the developed world spell opportunity for this industry leader.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'