Jumbo borrowers were more active and received far more benefits than the average homebuyer in 2014. Over the year, jumbo borrowers saw lower mortgage rates than normal borrowers or, at the very least, smaller down payments and private mortgage insurance requirements.
At the beginning of 2014, fixed jumbo mortgage rates started at 4.59 percent. Between August and September, jumbo loan mortgage rates were actually below the already very low rates from standard mortgages. In late September 2014, a jumbo loan borrower could expect to pay around 4.24% interest compared to a standard fixed rate mortgage borrower paying 4.36 percent. In the week ending January 30th, 2015, the jumbo rate hit historic lows of 3.92 percent.
Jumbo borrowers have seen increased benefits over the last year. Banks and credit unions have offered down payments less than twenty percent while others have offered not private mortgage insurance costs. Both can really free up the eligibility of a jumbo borrower.
As the benefits have risen, jumbo borrower activity has followed suit. Jumbo loans took up 19% of the mortgage market in 2014, up from 14.4% in 2013, and the highest percentage since 2002. More borrowers became eligible and took out jumbo loans in 2014 and the average age of a jumbo borrower fell from 46 to 44 years old.
As banks have loosened their jumbo loan requirements, they have seen more jumbo buyers coming to the market. With more jumbo borrowers coming out of the woodwork, the banks have been able to continue loosening requirements and lowering rates. So far, the activity of higher end buyers coming out of the housing recession has been