Jumbo Rates increase

Daily Real Estate News  |  March 27, 2008Jumbo Loan Rates to Climb Higher
Jumbo Federal Housing Administration mortgages are likely to carry interest rates that are at least a 0.375 percentage point higher than rates on normal FHA loans, said Mahesh Swaminathan, a mortgage strategist at Credit Suisse in New York.

The current rate for a normal 30-year fixed-rate FHA loan is about 5.875 percent, while the rate on the new larger one is initially 6.375 percent.

Fannie Mae and Freddie Mac also are introducing larger loans under temporary authority from Congress. Early indications are that the larger Fannie and Freddie loans also may require interest rates about 0.5 point higher than ordinary ones, Swaminathan said.

Nevertheless, rates on these loans are expected to be lower than those on mortgages that aren't backed by Fannie, Freddie, or the FHA.

Source: The Wall Street Journal, James R. Hagerty (03/27/08)