So you’re looking to purchase a home. Most folks may remember the days when everyone had a conforming loan. (A loan that is under $417k). Now with higher prices you may need a High Balance Conforming $417,000 to $625,500 or even a Jumbo loan $625,500 – $1.5 million. You’re still shooting for 20% or more down. Does it make sense to go with the conforming loan because it’s the best rate? Well it may not be.

Here’s a what Shaveta Sareen from Bank of America pointed out:

“Buyers are still under the impression that Jumbo loans have much higher rates than High balance loans. Historically this was true, however there has been a gradual shift in the mortgage market and how mortgages are being priced. Jumbo loans are a portfolio product where a bank is keeping the loan and therefore has the ability to price them aggressively. When seeking a pre-approval in a Jumbo price range with minimum down payment of 20%, it is prudent for a buyer to keep an open mind and review Jumbo interest rates in comparison to High Balance Conforming Rates. They may be pleasantly surprised as on any given day the interest rate on a Jumbo loan may be the same or slightly lower than the rate on a High balance conforming loan.”

***High balance Conforming interest rates: Loan amount between $417,000 to $625,500)

***Jumbo Loans: Loan amount above $625,500 to 1.5million

As you can see, it’s important to be educated and have your team in place so you don’t make the wrong choices. You could have a larger loan, smaller down payment and still have a smaller monthly payment. Money in your pocket. That’s what’s important. Happy House Hunting!!!