Mortgages, used to finance properties that are too large to sell to Fannie Mae or Freddie Mac, are typically within a tenth of a percentage point of each other. But since the start of the pandemic, there has been a much smaller group of lenders willing to offer jumbo loans, according to the Wall Street Journal.
“I saw a range of a quarter to half a percentage point for the exact same borrower,” Mike Fratantoni, chief economist for the Mortgage Bankers Association, told the publication.
Another mortgage broker, Anthony Bird, said he saw a rate of 3.25% and a rate of 5%.
The gap is due to the fact that securitization and correspondence channels – the latter referring to banks that would buy loans from other lenders – have not seen much activity since markets were hit by the crisis. coronavirus pandemic in March.
In July, jumbo rates exceeded those on traditional mortgages for the first time in five years. Last week, the average rate for a jumbo loan was 3.41% compared to 3.13% for a 30-year fixed-rate mortgage, according to the Mortgage Bankers Association. weekly survey, which covers 75 percent of the residential mortgage market. [WSJ] – Sasha Jones