Paying points wise in today’s market

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

Current stresses in the home loan market have changed the ground rules for borrowers in many ways. A recent article focused on the confused state of affairs in the market for jumbos, which are loans larger than $417,000. Jumbos are priced higher than smaller loans even when they can be purchased by Fannie Mae and Freddie Mac, and are priced much higher when they can't. This article reports on the results of an online shopping exploration I did on Dec. 12. I priced conforming loans of $400,000 that can be purchased by Fannie and Freddie, and $800,000 (jumbo) loans that cannot. Within each size class, I looked at 15- and 30-year fixed-rate mortgages (FRMs), and 5/1 adjustable-rate mortgages (ARMs). Prices were obtained from seven Upfront Mortgage Lenders (UMLs), who are Internet-based lenders that meet my standards for pricing transparency, and from the four largest depository institutions in the market: Bank of America, Citicorp, Chase and Wells Fargo. To assure comparabili...