Well it's official lenders and investors are looking for jumbo product. With jumbo rates the lowest they've been for awhile AND a private securitization market that has awaken partially, originators are now being tasked with getting those jumbo borrowers into refinance and buy more property.
What will be different than the jumbo loans of several years ago, will be a steady dose of income documentation..real income documentation, verification of assets, and real clear view of the properties value. Yes, investors want the product but they want the least risky available.
We will not see a stated income deal for...check that. I predict that we will in fact see a state income type transaction for the self employed. Even the Fed's have spoken about the need for loan products geared to our self employed citizens (voters). And I agree wholeheartedly that these products should be available to sophisticated borrowers who understand leverage and risk.
As long as the mortgage industry does not take advantage of itself and keeps these jumbo guidelines in order and with transparency of risk to all, a niche in the mortgage industry can again flourish.
Expect 80% as a maximum LTV and borrowers will need to document everything. Rates for these types of mortgages run about 5.75%-6.00% depending on the particulars. Adjustable and Fixed rates are available. Rates of course float and change often.
For jumbo loans to and the niche to prosper values will need to remain static or at least rise slightly to ensure borrowers have skin in the game. If the economy were to falter again, and values suffer, then more jumbo borrowers will default. So as long as the current economic climate continues to improve, so shall the availability of specialized loan products.
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