Jumbo Loan Rates Are Much Lower

For the last few months jumbo loan rates have been about 1% lower than conforming loan amount rates. Jumbo loans begin at $684,251 in metro Denver. Why are jumbo loan rates lower? It’s because the Fed’s actions and plan to reduce their balance sheet has no impact on jumbo loans. Why? The Fed doesn’t own any jumbo loans as they only own agency conforming loans from Fannie, Freddie and Ginnie.

So, if you have buyers who are rate conscious they are better off going with a jumbo loan for as little as 15% down instead of putting a lot more money down. Then, after 1 or 2 payments on the new loan they can reduce the balance on their loan and ask for their loan to be re-casted which reduces their monthly payment.