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Jumbo Financing Lives! Appraisals Getting Done; Bridge Loans; Interest Rate Update

A woman with brown hair wearing a blue shirt works on securing her jumbo financing for her home purchase.

JUMBO FINANCING STILL AVAILABLE

Agents continue to ask us if we are still offering jumbo financing – and the answer is emphatically yes!

Rates remain in the mid-3% range for strong borrowers with 20% down and ample reserves.

Weaker borrowers (with less than 20% down, limited reserves and/or lower credit scores) in the jumbo price range should consider 1st/2nd Combo Financing.

APPRAISALS GETTING DONE – “DELAYED APPRAISALS” UNNECESSARY

In mid-April the Fed Reserve and other agencies released a proposal to allow lenders to delay appraisals for up to 120 days after a transaction closes.

This was an effort to offer relief to lenders who could not get appraisals done, but it is unnecessary now for a few reasons.

First and foremost – we are not having trouble getting our purchase appraisals done in a timely manner.

Secondly, we are getting more appraisal waivers and/or interior inspection waivers.

And lastly – delaying an appraisal until after close is a potential nightmare; what happens if it comes in low? What if major repair issues are called out?

HARD MONEY & HELOCS IN LIEU OF BRIDGE LOANS

Bridge loans have all but dried up, but sellers in need of “bridge financing” can still obtain a HELOC or Hard Money (a loan based solely on equity).

HELOCs are often the best option for bridge financing even in normal times.

INTEREST RATES

Interest rates are again very close to all-time record lows.

What is interesting is that mortgage rates would be much lower but for all of the uncertainty in the market right now – particularly with respect to forbearances and loan servicing issues.

The “spread” between the 10 year treasury (0.6%) and average mortgage rates (3.33% in Freddie Mac’s most recent survey) is as high as it has ever been.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167

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