$1,350,000 on the Shores of Lake Norman

Bank of America has cut interest rates on jumbo mortgage loans in the hopes of expanding its share of what the bank sees as an underserved market for loans too big for purchase or guarantee by Fannie Mae and Freddie Mac.

Not everybody will qualify for the 30-year, fixed-rate loans of up to $3 million that Bank of America has been offering at reduced rates since January, with interest rates currently in the high 5 percent range.

In order to qualify, borrowers will need strong credit (a 720 FICO score or above), down payments of 20 percent or more, documented income, full appraisals, and assets sufficient to cover six months of payments, said Bank of America product management executive Vijay Lala.

But Bank of America thinks its fixed-rate jumbo loans will prove to be attractive to qualifying borrowers, because many competitors will be hard-pressed to match its rates.

Jumbo loans have become more expensive and harder to come by since September 2007, when rising delinquencies gave investors who fund most home loans through the purchases of mortgage-backed securities cold feet about “private label” securities that don’t carry the backing of Fannie and Freddie.

Unlike some lenders who must securitize and sell the loans they originate, Lala said Bank of America has plenty of room on its balance sheet to fund jumbo loans and hold them for investment, and is “putting the pedal down on our pricing and going after this market.”

Lala said Bank of America and Countrywide Financial Corp., which it acquired last year, funded $16.12 billion in jumbo loans in 2008. Although jumbo loan funding dropped to just $2.4 billion in the fourth quarter, Bank of America is already seeing “very nice volume” since introducing its more aggressive pricing.

Bank of America will only offer the loans directly to consumers — and not through independent mortgage brokers — through retail bank branches and Countrywide Home Loans (which will be re-branded Bank of America Home Loans on April 22). Lala said he expects many borrowers will be existing Bank of America customers.

The loans are aimed not only at homebuyers, but homeowners with adjustable-rate mortgage (ARM) jumbo loans who are looking to refinance at better rates. For both purchases and refinancings, the loan-to-value ratio can’t exceed 80 percent on loans up to $1.5 million, or 70 percent on loans up to $3 million.

While some other national lenders, such as ING Direct, offer jumbo loans, in many markets small community banks that lend against local deposits have been the main players, said Dan Green, a Cincinnati-based loan officer for Mobium Mortgage Group Inc.

Many of those lenders are able to aggressively price jumbo ARM loans but may not offer fixed-rate jumbo loans at all, Green said, because they are more sensitive than Bank America to changes in interest rates that affect lenders’ own funding costs.

Although niche lenders are offering rates on 3-year or 5-year jumbo ARM loans of around 4.5 percent that carry significantly lower monthly payments at the outset, some borrowers may prefer the certainty provided by the higher rate offered by Bank of America on its 30-year fixed-rate loans, Green said.

“It’s nice there’s an outlet, and I suspect there will be competition soon,” Green said. He said Bank of America’s underwriting standards “aren’t the loosest or the strictest — they’re right down the middle of the road.”

After the secondary market for jumbo loans seized up in 2007, lawmakers raised the loan limits for Fannie, Freddie and FHA loan guarantee programs. For most of 2008, the $417,000 conforming loan limit was allowed to stretch to 125 percent of the median home price in high-cost markets, with a ceiling of $729,750.

Assuming that the jumbo loan market would be on its way to a recovery by now, Congress mandated the limits would step back down to 115 percent of median home price on Jan. 1, with a ceiling of $625,500.

The $787 billion economic stimulus bill passed by Congress in February, the American Recovery and Reinvestment Act, restored the limits in place during most of 2008 for the remainder of this year.

By Matt Carter, Friday, March 20, 2009.

Inman News

30 Year Fixed Rate   5.375% 

JUMBO >$417,000

30 Year Fixed JUMBO  6.25%

GOVERNMENT LOAN PROGRAMS

FHA 30 Year Fixed  5.375%

VA 30 Year Fixed  5.375%

USDA 30 Year Fixed  5.50%

Need a Great Lender, Try Suzanne!

Suzanne Blackwell

Mortgage Loan Originator

Peoples Bank

6125 Hwy. 16 South

Denver, NC  28037

PH: 704-483-3050

FAX:  704-483-7550

CELL:  704-746-5676

- Pay stubs.
- Tax returns.
- Financial statements (one that is less than 60 days old).
- Copies of additional monthly payments such as car loans, credit cards, student loans, etc.
- Any additional information (such as proof of additional income) that you think will help your banker to positively evaluate your credit request.

(As Reported by Rismedia)

Take the Time to Map Out How to Get to Your Destination!

1.  Start by learning about the $8000 Tax Credit and how it can help you.  There is a ton of information on the internet and here on my blog that can assist.

2.  Find a reputable lender.  I probably should take one step back here.  If you find a GREAT Realtor first, they should be able to assist with the rest.  Typically, Buyers only begin to work with Realtors at the point, that they are ready to start touring houses.  An experienced Realtor can make this process alot easier.  Often the best place to find a great Realtor is through word of mouth.  If several of your friends have had great experiences with a certain Realtor, you are likely to as well.  Use the Same techniques to find a great lender.

3.  Use the Lender to get a PRE APPROVAL, not prequalified.  Turn in your paperwork upfront and have a PRE APPROVAL on paper from the lender telling what you can afford.  This gets all of the surprises out of the way upfront.  A great lender can help you look at any problems on your credit report and correct them.  They can also advise you on cash that will be necessary to close on your new home.

Now your ready to look at those new homes!

3 Cherry Way - A New 55 and over Community Coming to Denver, NC!

If you were waiting for the bottom, I think we are there!

30 Year Fixed - 5.25%

30 Year  Fixed JUMBO – 6.125%

GOVERNMENT LOAN PROGRAMS                                         

FHA 30 Year Fixed  - 5.25%                        

VA 30 Year Fixed  – 5.375%                                                                            

USDA 30 Year Fixed – 5.375%

Wellesbourne Lane off Island Pointe Road in Sherrils Ford - Waterfront at $900,000

30 Year Fixed Under $417,000 – 5.125%

30 Year Fixed Above $417,000 – 6%

FHA 30 Year Fixed – 5.25%

VA 30 Year Fixed – 5.375%

USDA 30 Year Fixed – 5.5%

Please note that USDA Financing can be used in ALL OF LINCOLN COUNTY!  USDA offers 100% financing, which is hard to come by these days!

Special Thanks to Suzanne Blackwell for her Weekly Updates!

Bank of America has recently rolled out some programs great interest rates for those considering Jumbo Loans.  The Government Backed Loan Programs, Fannie Mae and Freddie Mac, are only for loans up to $271,000 in our area (Lincoln County), so if you are looking to finance a home over that amount, it can be difficult and include very high interest rates.  At the moment, Bank of America is offering interest rates in the high five percent range for a 30 Year Fixed.

You will need to have strong qualifications for these loans.   The loans can be up to three million dollars.  Your FICO must be 720 or higher to qualify, you must have a 20% down payment, provide income documentation,  and assets sufficient to cover six months worth of payments.

I Found some of this information covered in an Inman News Article and thought that this is just the kind of programs we need right now!  I wanted to get the word out!  These loans are even available to those homeowner’s in need of re-financing. 

A Sailview Beauty with Boat Slip - Listed At $599,900