Jumbo Loan Mortgage Providers

[dpusa]

All,

We are purchasing a home and are in need of jumbo mortgage loan. We have our 20% down, but wanted recommendations from the wiser folks here on either recommended banks/brokers.

Thanks
DP

[German Expat]

We used Penfed

https://www.penfed.org/mortgage-rates-all/#Tab4

They do have various other products as well. Mortgage processing can be very slow with them and will very much depend on your processor.

[john94549]

If you happen to be in their service area, you might check First Republic.

[dhodson]

I used suntrust

[FoolStreet]

I saw an article today recommending tech credit union. Wells private banking also has good products.

[VgSince1982]

My advice: Add a mortgage broker to your list in addition to shopping retail.

Jumbo lending comes and goes. It is not a Fannie/Freddie purchased loan, so the avenues for lending are varied and less uniform. I am a broker in NC and lenders we work with are adding back jumbo products that were taken away a few years ago. The more options you have as a consumer, the better!

[blackstone]

Also consider getting two loans rather than one. A 30 year conforming loan + an add on ARM. In some situations this works out better.

[dpusa]

Also consider getting two loans rather than one. A 30 year conforming loan + an add on ARM. In some situations this works out better.

Blackstone, can you explain this further?

All - thanks so much for the guidance! I really appreciate it!

[hand]

Also consider getting two loans rather than one. A 30 year conforming loan + an add on ARM. In some situations this works out better.

Blackstone, can you explain this further?

All - thanks so much for the guidance! I really appreciate it!

This approach yields the following benefits:
1) A big portion of the debt (likely $417k) is financed at the lowest fixed rates available - federally subsidized conforming
2) Remaining debt is decoupled from the conforming loan, so if goal is to pay down some of the loan faster than the 30 year amortization, cash flow benefits occur when secondary loan is paid off, rather than waiting for entire loan to be paid off.
3) A portion of the debt can be financed at a lower adjustable rate with minimal risk depending on your repayment expectations.

Downsides include:
1) Increased complexity
2) Likelihood of increased costs vs. a jumbo if second loan is not paid off early.

[dpusa]

Also consider getting two loans rather than one. A 30 year conforming loan + an add on ARM. In some situations this works out better.

Blackstone, can you explain this further?

All - thanks so much for the guidance! I really appreciate it!

This approach yields the following benefits:
1) A big portion of the debt (likely $417k) is financed at the lowest fixed rates available - federally subsidized conforming
2) Remaining debt is decoupled from the conforming loan, so if goal is to pay down some of the loan faster than the 30 year amortization, cash flow benefits occur when secondary loan is paid off, rather than waiting for entire loan to be paid off.
3) A portion of the debt can be financed at a lower adjustable rate with minimal risk depending on your repayment expectations.

Downsides include:
1) Increased complexity
2) Likelihood of increased costs vs. a jumbo if second loan is not paid off early.

Blackstone thanks... make complete sense and we do plan to overpay ours. Another logistical question, how does one even go about doing this though? Penfed are giving jumbo loan rates of 3.5% for a 30 year and 2.75% for a 15 year... would those rates negate the need for the above?

[hand]

Not Blackstone, but likely little room to improve if PenFed will be able to write a 3.5% Jumbo, unless you absolutely need the improved cash flow in a couple years and are willing to pay extra for the benefit.

Be aware, folks are having difficulty getting PenFed to close on time. Not a big deal for a refinance, but be sure you understand the risk, consequences since this is for a housing purchase.

I would suggest talking to a reputable mortgage broker in your area to see what they suggest and what their premium is over PenFed.

Note beware of your realtor steering you to a less than optimal broker who either provides (illegal) kickbacks or happens to work for a firm co-owned by the realty (sleazy, but not illegal).

[dpusa]

Not Blackstone, but likely little room to improve if PenFed will be able to write a 3.5% Jumbo, unless you absolutely need the improved cash flow in a couple years and are willing to pay extra for the benefit.

Be aware, folks are having difficulty getting PenFed to close on time. Not a big deal for a refinance, but be sure you understand the risk, consequences since this is for a housing purchase.

I would suggest talking to a reputable mortgage broker in your area to see what they suggest and what their premium is over PenFed.

Note beware of your realtor steering you to a less than optimal broker who either provides (illegal) kickbacks or happens to work for a firm co-owned by the realty (sleazy, but not illegal).

Hand, thanks for the heads up on PenFed... being homeless is not an option

[sclaus]

Have you looked into First Internet Bank?
http://www.firstib.com

[john94549]

FWIW, our re-fi with First Republic was $417K conforming (30 yrs, fixed, no points) + HELOC for the balance. It can be done all in the same place, at the same time. Rates on the conforming might be up a tad, but 3.5% is in the ballpark. The HELOC is at prime minus 0.2 .

[LAbob]

+1 for First Internet Bank.

[mcrunyan]

We shopped around and have gone through the jumbo purchase pre-approval process with Chase and Bank of the West (just need to find a house at this point). They both had good rates with no points (at the time of application they were around 3.625 and 3.75% but have probably gone up). BotW was offering an 1/8th of a point discount if you set up a checking account with them.

FWIW, I just tried to get a 30yr fixed jumbo rate quote out of the First Internet Bank site and it told me: "We're sorry but there are no products available that meet all of your search criteria. However, the following alternative products are available." and then offered me a 5- and 7-year ARM. Would be curious from those recommending FIB if they do offer jumbo loans; perhaps you have to call them to get rates.