What Are Today’s Jumbo Refi Rates?
On Friday, October 15, 2021 according to Bankrate’s latest survey of the nation’s largest mortgage lenders, the average 30-year jumbo refinance rate is 3.180% with an APR of 3.250%. The average 15-year jumbo refinance rate is 2.420% with an APR of 2.480%.
Current Jumbo Refinance Rates
|30-Year Fixed Rate||3.170%||3.300%|
|30-Year FHA Rate||2.820%||3.710%|
|30-Year VA Rate||2.900%||3.110%|
|30-Year Fixed Jumbo Rate||3.180%||3.250%|
|20-Year Fixed Rate||3.030%||3.170%|
|15-Year Fixed Rate||2.410%||2.600%|
|15-Year Fixed Jumbo Rate||2.420%||2.480%|
|5/1 ARM Rate||2.710%||3.980%|
|5/1 ARM Jumbo Rate||2.720%||3.690%|
|7/1 ARM Rate||3.140%||3.880%|
|7/1 ARM Jumbo Rate||3.430%||3.730%|
|10/1 ARM Rate||3.450%||4.000%|
|30-Year Fixed Rate||3.200%||3.370%|
|30-Year FHA Rate||2.760%||3.630%|
|30-Year VA Rate||2.860%||3.030%|
|30-Year Fixed Jumbo Rate||3.210%||3.300%|
|20-Year Fixed Rate||3.070%||3.230%|
|15-Year Fixed Rate||2.430%||2.680%|
|15-Year Fixed Jumbo Rate||2.440%||2.510%|
|5/1 ARM Rate||2.800%||3.910%|
|5/1 ARM Jumbo Rate||2.950%||3.600%|
|7/1 ARM Rate||3.110%||3.760%|
|7/1 ARM Jumbo Rate||3.400%||3.600%|
|10/1 ARM Rate||3.370%||3.990%|
Rates as of Friday, October 15, 2021
What Are the 2021 Jumbo Loan Limits?
A jumbo loan is a mortgage that helps you buy an expensive home in an expensive area. These loans are larger than what Fannie Mae and Freddie Mac offer, and they require larger down payments and higher interest rates. Similar to traditional loans, lenders will look at income, credit score, and credit history. But the qualifications for jumbo loans are stricter than traditional loan requirements.
Jumbo loan limits vary by county but are usually higher in areas with a higher cost of living. In November 2020, Fannie Mae and Freddie Mac announced higher loan limits. These are conforming loan limits for single-family homes.
- $548,250 for most of the U.S.
- $822,375 for high-cost areas, such as New York City, Los Angeles, Washington, D.C., and Hawaii
Loans larger than these are considered jumbo loans. Head over to the Federal Housing Finance Agency to find conforming loan limits in your area.
How to Refinance a Jumbo Loan
Refinancing a jumbo mortgage follows the same process as a conventional mortgage. However, there is one key difference: The lender will have higher standards you’ll need to meet because you’re dealing with a larger sum of money.
Here are the steps you should take if you’re interested in refinancing a jumbo loan, which is just any mortgage that’s larger than the conforming loan limits set by the Federal Housing Finance Agency.
1. Make sure you qualify
You’ll need a high credit score to refinance a jumbo mortgage, typically 700 at minimum, though many lenders require scores higher than that. You’ll also need substantial income and large cash reserves. Your debt-to-income ratio (DTI) will need to be lower than what’s required with other types of financing, typically a DTI of 36% to 43% is the maximum for a jumbo refinance. You’ll also usually need enough cash to cover 6 to 18 months of monthly payments.
Most jumbo refinance loans require at least 20% equity in the property. However, to qualify for the best refinance rates, you may need to have even more equity. This can be a challenge if you are doing a cash-out refinance.
2. Shop around for the best deal
To find the best deal, you’ll need to compare mortgage lenders. While your financial situation has a big impact on the rates you’ll qualify for, each lender will evaluate you differently. So it’s important to get a few offers to compare to ensure you’re getting the best combination of rates, fees, and terms.
3. Collect your documentation
During the mortgage underwriting process, your lender will verify all of your financial information. So you need to be prepared to provide the following:
- Proof of income: W-2, 1099s, pay stubs, or tax returns
- Proof of assets: Bank accounts, stocks, bonds, retirement accounts
- Statement of debts: Student loans, auto loan, credit cards
- Proof of insurance: Homeowners insurance, title insurance
4. Close on your new jumbo mortgage
Just like with a purchase mortgage, a refinance loan will go through a closing process. During this process, the lender will validate your ability to repay the loan and confirm the property’s value with an appraisal.
The closing process usually takes 30 to 45 days for a mortgage refinance. But today’s low mortgage rates have spurred a refinance boom. So expect closing to take longer than normal as lenders struggle to keep up with the demand.
When Should You Refinance a Jumbo Loan?
The best time to refinance a jumbo loan is when you can get a more favorable refinance rate or repayment term. With a lower rate or term you may be able to pay off the loan more quickly or significantly reduce your monthly payment.
Each year, the loan limits for conventional loans are adjusted. For 2021, they’ve increased to $548,250 for single family properties. So with a refinance, you may be able to switch from a jumbo loan to a conventional loan. Conventional loans almost always offer lower interest rates than jumbo loans. So refinancing to a conventional loan could dramatically reduce your mortgage rate and monthly payments.
What to Consider Before Refinancing a Jumbo Loan
When considering a jumbo mortgage refinance, you should look at the long-term and short-term costs. So the interest rate and repayment term are important, but they’re not the only things to consider.
Lenders charge upfront fees for a refinance loan of 3% to 6%, which is a sizable sum for a large jumbo loan. If you have plans to move in the near future, these upfront costs may outweigh the potential savings. To ensure that refinancing makes sense, use NextAdvisor’s mortgage refinance calculator to run the numbers.
When thinking about refinancing, how long you want to be responsible for paying a mortgage should factor into the equation. If you’ve already been paying on your existing 30-year mortgage for 10 years, you may not want to refinance into a new 30-year loan. Not only would you be adding 10 years onto your mortgage, but you could end up paying more interest over time.
How to Shop for Jumbo Refinance Rates
To find the best jumbo refinance rates, you’ll need to shop around. But shopping for a jumbo refinance might not be as easy as refinancing a conventional loan because not all lenders offer jumbo loans. So you’ll have to do some research to find lenders to compare refinance rates with.
Once you’ve found a few lenders who offer jumbo loan refinancing, you’ll need to provide each with basic information to get pre-approved for the loan or to get a ballpark estimate of interest rates. To get a full Loan Estimate, with more detailed rates and fees, you will need to fill out an application. Once you have a 2 to 3 Loan Estimates, you can easily compare rates and fees to find the best deal.