Can you imagine paying 8% for your mortgage? If you’re over 30 you can. You’ve probably paid a lot more than that before. But we’ve become spoiled by rates in the fives and sixes. Eight percent sounds astronomical after what we’ve enjoyed for the last few years. But that’s what’s happening. Wells Fargo announced the rate hike today, and other lenders are expected to follow them.
Of course those rates are just for “jumbo” loans, or loans over $417,000. (Don’t ask me where they came up with $417. There must be something magic about that number — or maybe they wanted to say $425, but $417 looked more random — more like they actually gave it some thought.) So if your mortgage is over $417 K you’ll be paying a premium of about 1.5%. Now there has always been a premium for non-conforming loans, but it’s usually between half and three quarters of a point, so this is significant.
If you want to read the whole story about the rate hike, with the reasons, etc. Click here to go to CNN Money.
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