Consolidating Conforming & 2nd Mortgage to Jumbo

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sg2060
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Joined: Thu Oct 31, 2019 3:43 pm

Consolidating Conforming & 2nd Mortgage to Jumbo

Post by sg2060 » Tue Jan 14, 2020 6:27 pm

Due to possibly receiving poor advice from my mortgage broker or due to the constraints of having to close quickly, I currently have a 30-year conforming loan (480k @ 4.0%) and fairly significant second mortgage that's on a promo for another 6 months (165k @ 1.99%). Given the recent drop in interest rates, I started to explore some more permanent jumbo loan options (30-year, 5/1, 7/1, 10/1).

Wells Fargo and Chase have both said my goal of consolidating conforming & 2nd to a jumbo loan is considered a cash-out refinance and their quotes have been significantly higher (50-75 basis points) than a straight jumbo refinance.

Does anyone know why this is? I'm not taking any cash out, and they'd be lending the exact same amount of money with no material difference between my circumstance and some hypothetical borrower that had the same amount of loans outstanding but in one jumbo loan. LTV would be 80% on the refinance. Thanks for any advice!

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