Interview with Michael Wiener, Sr. Mortgage Advisor at Bank of Commerce Mortgage. Del Mar/San Diego, Ca

Q: What is a Jumbo mortgage?

A: When I started in 1993, there were only two distinct numbers to focus on. Any loan amount above the pre-set loan limits was considered a jumbo and any loan amount below was conforming. Today, the term jumbo or better yet, what are the best jumbo rates, can be confusing.

Q: How so?

A: Now we have conforming loans, Freddie and Fannie, true jumbo loans and with the introduction of a third level a few years ago, conforming- jumbo. But to make it more confusing is that each county has a different loan amount limit. For San Diego county, the cut off is $417,000. Below is conforming. Any loan amount higher than this is considered jumbo.

Q: Conforming jumbo or a true jumbo?

A: Any loan amount higher than $546,250 is now a true jumbo. This changed October 1st of this year. The old loan amount was $697,500. So when clients ask me for the best jumbo rates, my job is to find out exactly what they really mean. Conforming jumbo or a true jumbo.

Q: What are the best jumbo rates?

A: The best is different for each deal that I review. Does my client need an adjustable rate mortgage because they are short term, do they want to pay down down their current mortgage to obtain a lower rate, do they need a $2 million loan for their purchase. The list goes on. So, answering your question of “what are the best jumbo rates” is not a simple answer.

Q: Are jumbo rates different with each lender?

A: I have been in this business a long time, and let’s just say that there are some really good loss leaders out there that will advertise, “we have the best jumbo rates” at 1.99%. It just isn’t out there. All lenders are very close in rate, maybe a .25% difference on any given day.

Q: Why would someone work with you?

A: I am trained, licensed professional who has 19 years under my belt. I have successfully closed over 3,000 loans. My clients are my clients because they trust me and know that I will deliver on time and as discussed. They do not need to search the internet looking for the best jumbo rates. They are smart enough to know that they will end up in some lost black hole. The best jumbo rates that I deliver are what is best for them for their transaction. The real estate agents that I work with know that if I am the mortgage advisor on the deal, it will close and it will close on time.

Q: What type of jumbo loans to you offer?

A: All of them. From conforming jumbo to true jumbo loans. Up to $5 million. We have fixed rates, adjustables, interest only, FHA, VA, and reverse mortgages. When I say that we have the best jumbo rates, again, I mean that we have what is best for my client for their individual needs. All of us are close in rate.

Jumbo Mortgages are loans that were created in order to provide financing for consumers requiring a loan amount that exceeds conventional loan limits. Fannie Mae (FNMA ) and Freddie Mac (FHLMC) are two government sponsored agencies that set the standard for any mortgage that they are willing to purchase from a lender. They are the largest purchaser of mortgages in the United States buying from private lender and banks. In most parts of the country they will only provide financing for loan amounts under $417,000, when a loan amount exceeds this it is referred to as a “Jumbo Loan”.

Residents of California can benefit from this type of a loan more so then in other parts of the United States because of the high cost of living. In years past Jumbo Loans use to be associated with purchasing luxury homes, but now they are beginning to become more common place in larger cities and states where the average cost of a modest home exceeds $417,000. The average assessed value of a home in California is around $380,000, and is predicted to rise in the next few years. With this rise in cost Jumbo Loans are becoming a viable option for many consumers.

In order to get the best Jumbo Loan in California home buyers need to be as educated as possible on the product. Because of the nature of the loans, lenders consider them to be high risk loans and often come with higher interest rates then standard mortgages. Part of the learning process is to not be intimidated and shop around as much as possible, asking questions and meeting with several lending associations. Some consumers may be concerned with inquiries made on their credit reports as they shop around but this is a needless worry as long as it is the same type of inquiry that is being made within 30 days of each other they will only be counted as one with the credit bureau.

Getting the best Jumbo Loan in California or in any other state, is best achieved when the consumers are aware of their debt to income ratio and are striving toward lowering it. Because of the higher risk associated with Jumbo Loans the consumer has a better chance at securing a loan with a lower interest rate if their debt to income ratio is in line with the lending agencies standard. The more financially stable and responsible the consumer, the lower the risk they are to the institution. Along with lower debt, many lenders will also require a larger down payment then with standard mortgages. These are all things to consider as a consumer who is interested in wanting to have the best Jumbo Loan they can find.

When it comes to finding the best mortgages much of it depends on the fiscal responsibility of the consumer. With a Jumbo Loan, creating a financial canvas with low debt and a large down-payment is the best way to ensure securing a quality loan.