A jumbo loan is defined as a loan above the Fannie Mae and Freddie Mac loans limits. The 2025 loan limit is $802,650.
As I write this article [11/24/24], I’m excited, not because of the national average for mortgage interest rates, which ended a pretty dull week and are stagnant, currently at 7.03%. I’m excited because loanDepot just rolled out a new program, Jumbo Advantage Select and the improved interest rates and or point cost savings we’re seeing are phenomenal. The lower the rate, the higher the discount points are paid at closing. This program is a game changer.
It made a huge difference for my jumbo loan customer today, but a bonus is that the loan can be used for conforming loan limits as well! I ran an example on a $400k loan at 6.625% (APR 7.038%). The Jumbo Advantage Select had the same rate of 6.625% (the APR reduced to 6.973%). In terms of dollars, what does this mean? On a regular loan, the point cost was 2.974 pts or $11,896. With the Jumbo Advantage Select, the rate was the same, however, the points were 1.351 or $6,604 – a savings of $5,292 in upfront loan costs!
In another example, the sales price is $1.25M and the loan is $1.0M. With the rate staying at 6.625%, our best brokered source was 6.625% (APR of 6.901%). With the Jumbo Select, the APR was now 6.779%. Bottom line, the point costs were reduced by $16,090.
Not all lenders have the same programs, it pays to do your due diligence. Read my article about permanent buydowns at https://ashland.oregon.localsguide.com/permanent-interest-
DAVE PORTER has been in lending for four decades. He can be reached at 541-708-4020 or at dporter@loanDepot.com. He is licensed to originate home loans in OR, CA and WA.
State disclaimer: loanDepot.com, LLC NMLS ID 174457. www.nmlsconsumeraccess.org Licensed by the OR Division of Finance and Corporate Securities, Mortgage Lending ML-4972.| WA: Licensed by the WA State Department of Financial Institutions, Consumer Loan Company CL-174457.
