General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWant a good mortgage rate? Be a millionaire!
Want to get a good rate on a new mortgage? Two tips: Be wealthy, and borrow more.
For the first time in recent memory, lenders are offering well-heeled buyers large jumbo mortgages at the same or even better interest rates as smaller loans. The trend has helped fuel a resurgence at the high end of the real estate market. Sales of homes priced $1 million or more are soaring as lower-priced properties lag, accentuating the uneven nature of the economic recovery.
The share of homes selling for at least $1 million fell when the 2008 financial crisis hit, but it recovered faster than the rest of the market during the past two years. It now hovers at a level last seen near the housing booms peak in 2007, according to research firm CoreLogic. The rates help, and so does a robust stock market. The number of homes sold for $1 million or more climbed 8 percent this year while those at every other price point combined fell 4 percent, according to the National Association of Realtors.
Many people are finding out by accident that they can often get a better rate on a $700,000 mortgage than a $400,000 mortgage, said Guy Cecala, publisher of Inside Mortgage Finance. The opportunities for wealthier borrowers are now better than theyve been in a decade as far as rates and terms.
http://www.washingtonpost.com/business/economy/buyers-of-houses-priced-at-the-high-end-are-seeing-attractive-mortgage-rates/2014/11/07/da2ae312-4d68-11e4-8c24-487e92bc997b_story.html
For years, the reverse was true: jumbo loans came with higher interest rates than smaller loans.
Just another perk of being a member of the moneyed class.
Travis_0004
(5,417 posts)Its a lot easier to underwrite 1 jumbo mortgage than chasing 15 smaller mortgages. There are a lot of costs that go into a mortgage, and the closing rate for a bank on a mortgage is pretty low. I applied for 3 mortgages, yey only went with one, so 2 mortgage companies paid to run my credit, overnight me loan doccuments, and spend a few hours on my application for nothing.
So I can understand why a bigger loan is more profitable to a bank, which translates to a lower interest rate.