Jacksonville Florida Super Jumbo Mortgage Rates
Jacksonville Florida Jumbo Mortgage Rates
Jumbo and Super Jumbo Mortgage Rates are Amazing Right Now
I have been working within the mortgage industry in Florida for about 18 years now and have never seen anything like what is going on right now. Interest rates on Jumbo and Super Jumbo mortgages are unbelievable!
Thanks to a negative outlook regarding our economy as well as lackluster investment, interest rates have been pushed to 50 year lows! Mortgage interest rates on certain loan programs such as the 5/1 adjustable rate mortgage and the 7/1 adjustable rate mortgage are in the 3’s.
For example, current pricing for a 7/1 ARM, $2,000,000 loan, primary residence, purchase, 70% or less loan to value is at 3.75%! (No points, as of 08/30/2011) Second home pricing is similar but not quite as good. (Pricing varies based on scenario)
There is an old rule of thumb that many customers go by that really doesn’t apply especially with Jumbo and Super Jumbo mortgages. Many believe that it does not make sense to refinance their mortgage unless the customer’s interest rate drops by at least 2%. That is simply not true for a few reasons. First of all there are situations where we as mortgage bankers can pay closing costs for the customer. If I am paying all of your true hard costs you are essentially getting a free loan. If I bring your rate down ½ a percent and the loan is free that makes sense.
Another situation where that old rule of thumb does not apply is with jumbo and super jumbo loans. Bringing the customer’s interest rate down 1% on a million dollars saves that client about $550 per month. Dividing savings into closing costs that person will break-even at around the 11th month. You determine break-even by dividing savings into closing costs. In other words if they intend to stay in the home and in the loan longer than 11 months, that makes sense.
Half of the closing costs that a customer pays associated with a mortgage loan are fixed and the other half are contingent upon the size of the loan. Fees such as underwriting fee, application fee, recording fee, credit report fee will be the same if your loan is $30,000 or $3,000,000. Other fees such as appraisal or title insurance or doc stamps and intangible tax will always adjust according to loan size.
Remember, the economy of scales are in your favor with the larger loans, so don’t be deterred by what seems to be large loan costs because when you take into account the power of interest and you intend to stay in that home for the long term it will make dollars and sense. Ask your local banker to put an estimate together on paper so he can show you the money!
Jacksonville is a great city in the upper eastern corner of Florida and it is home to some fantastic places to purchase real estate. Many super jumbo customers are in a position to purchase their home out right for cash but choose to take the mortgage to take advantage of low intrest rates (In the 4's) and also the tax deduction of deducting interest. (At least for now. The Obama administration is contemplating doing away with this deduction for mortgages over $500,000)
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