Jumbo Market Heating Up

Jumbo loans are coming back

Jumbo loans are coming backIn addition to overall home sales being up, the sale of luxury homes – homes priced at $1 million and above – increased 7.8 percent in March compared to  levels from one year ago. Because of this fact, lenders are looking at jumbo loans as an appealing area of growth as other mortgage areas are in decline.
The lack of other mortgages is allowing smaller financial groups to step in and offer jumbo mortgages, which are holding around the same interest rates as conventional loans for the first time in 35 years. Small banks can now compete with larger ones because they don’t have to pay out as much money on the servicing end of it. This is letting them compete with larger interests like Wells Fargo, who is the dominating force in jumbo loan products. A new article on Realtor.org shared that the banking giant issued more than $43 billion in loans in 2013. But PHH Mortgage, a small lender in Mount Laurel, New Jersey, has become the second largest jumbo lender with $26 billion in loans last year, squeezing ahead of Bank of America in 2013.
Are you looking for a luxury home in Chicago? Would you consider securing your jumbo mortgage from a smaller local bank? Let us know why or why not in the comments!