Jumbo Mortgages Could See Rate Chops

The interest rates on so-called jumbo mortgages, those gigantic home loans New Yorkers often take because of the city’s astronomical housing prices, could drop soon. From the Journal:

Over time, the government’s rescue effort could make it easier for borrowers in high-cost markets such as California, New York and Boston to get a mortgage by reducing rates for jumbo loans, those too big for government backing, says Richard K. Green, director of the Lusk Center for Real Estate Development at the University of Southern California. Rates on fixed-rate jumbo loans currently average 7.91%, according to HSH Associates, more than a full percentage point above rates on conforming loans eligible for government backing, which jumped nearly a third of a percentage point Tuesday to 6.6%.

Jumbo Mortgages Could See Rate Chops