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Issue:

Business

 

Written by:

Ruth D

 

Date added:

July 17, 2015

 

Level:

University

 

Grade:

A

 

No of pages / words:

3 / 601

 

Was viewed:

2881 times

 

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Essay content:

Jumbo-mortgage rates are rising alarmingly despite long-term interest rates coming down. A prime 30-year fixed-rate jumbo loan now costs 7.34%, up more than 80bp (basis points) since mid-May. Jumbo loans, whose borrowers often possess high incomes and assets, are costing more than conforming loans because Wall Street has stopped buying them due to the higher risk factor...
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Jumbos are loans of more than $417,000, the limit observed by Freddie Mac and Fannie Mae, the government sponsored enterprises that buy loans in the secondary markets. In a tighter credit market, lenders are charging more for jumbos because of the extra risk of not being able to sell them to the investment community...
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