Low Jumbo Rates Moving Members to Banks
Two credit unions currently offering jumbo mortgage loans said they will still provide them, despite large banks in their markets beginning to aggressively price similar offerings.
Jumbo loans exceed the value of loans that can be sold to Fannie Mae or Freddie Mac. In most of the U.S., that defines the loans as those larger than $417,000, though in some higher-priced areas, the cap is $625,000.
Thomas Gray, senior vice president for lending, said the credit union had noticed some area banks dropped their rates on jumbo loans to match their rates for conventional loans. The credit union also decided it had the expertise and resources to compete.
“We started noting that the banks started dropping their jumbo loan rates from, say, half a percent over their conventional loan rates down to their loan conventional rates or even a little below,” Gray said. “So I went to my CEO about whether we wanted to compete with that, and we decided we did.”