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Jumbo-conforming mortgages were created by Congress to make homes in high priced areas more affordable. The people living in those areas may be breathing sighs of relief as those rates are beginning to drop. Many lenders cut their rates by 1/2% point late last week on the jumbo-conforming loans (loans that can be guaranteed by Freddie Mac or Fannie Mae and are between $417,000 and $729,750.) This rate cut now makes jumbo loans almost as cheap as standard conforming loans below $417,000
Still, getting a jumbo-conforming loan is harder than getting a standard loan due to stricter criteria. Generally Freddie Mac and Fannie Mae require higher credit scores, larger down payments, better income documentation and lower debt-to-income ratios on these loans.
The point of lowering the rates then was mainly to help people with equity in their home refinance an old jumbo loan into a cheaper rate according to many loan brokers.
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