Jumbo Financing...what's up with that?

The news media seems to be turning around and speaking positively about our economic rebound and an upswing in the real estate market nationally. Business Insider (http://www.businessinsider.com/) has an interesting article today about the state of the Jumbo financing market and its subsequent effect on luxury home sales and prices.

To make a generalization, tougher underwriting together with a bearish secondary market for Jumbo loan portfolios has resulted in higher rates for Jumbo ($417,001 to $729,000) and Super Jumbo ($729,001+) borrowers.

What is this doing to the luxury real estate market? Looking at the statistics, the news media is reporting correctly about the real estate turnaround. The government has intervened on the conforming level, and rates are superb. Inventories are falling and prices are rebounding in the lower price brackets, which account for 90% of all residential loans. In the upper brackets, which account for 10% of all residential loans and 30% of loan volume, sales are slow and inventories remain high due to the much discussed lack of Jumbo mortgage funding.

The National Association of Realtors has asked the government to intervene at the Jumbo level as it has at lower levels, but there is little interest in doing so. Joe Weisenthal of Business Insider summed it up very well by saying that the Jumbo market is the only "real" market we have to watch as it has been untouched by government hands. Economists may view that as a positive--but until the Jumbo market makes a turn for the better, inventories will remain high, prices will be low, sellers will be frustrated and buyers will be jubilant (or wringing their hands, depending on their financing options).

Better news--perhaps even "good" news: BUYERS WITH GOOD CREDIT CAN STILL GET AN EXCELLENT RATE ON A JUMBO/SUPER JUMBO LOAN. They just have to shop around. Remember--for the most part, these loans are not subject to government intervention--they are pure market products. There are several banks and brokers right here in Dallas who have access to competitive loan products for this category of financing. The qualifications are a little tighter, the percentage downpayment is somewhat higher (now 20% to 25% is to be expected at a minimum), but the money is there--it's just not "in your face" like it was 2 years ago, and you'll have to buy your own toaster.

Have a chat with these providers:

-Richard Woodward at Envoy Mortgage Pros: 972.661.5136
-Richard Allen at Bank of Texas: 214.346.3978
-Joel Dyke at SMI Lending: 214.295.2928
-Gary Eberhart at NexBank: 972.934.9712
-Gina Jackson, Cornerstone Mortgage: http://www.ginajackson.com/

A little research can result in a great real estate opportunity here at the bottom (or close to it) of the luxury market.