Buy big with jumbo home loans starting at 2.75%
It's charging just 4.125%, with no points and around $600 in fees for a 30-year, fixed-rate jumbo loan that can be used to buy or refinance a property.
That's one-fifth of a percentage point below the national average for that type of loan, according to our latest survey of major lenders.
On a 5-year, adjustable-rate jumbo mortgage, Gateway is offering an introductory rate of 2.75%, with no points and around $898 in fees.
Can you find jumbo home loans for less? Click here to compare this deal with the best mortgage rates from scores of other lenders in your area.
Monthly principal and interest on the fixed-rate jumbo would be $486 for every $100,000 borrowed. You can use our mortgage calculator to determine the monthly payments for the amount you want to borrow with this or any home loan.
For the adjustable-rate mortgage, payments over the first five years would be $415 for every $100,000 borrowed. Our adjustable-rate mortgage calculator can help you determine the monthly payments for that deal and give you an idea of what your payments would be after the introductory period is up.
Both calculators will provide a month-by-month amortization schedule that shows how much you've reduced your debt and how much you still owe if you want to pay off the loan.
Gateway Bank Mortgage is headquartered in Wilmington, N.C., and enjoys an A+ rating from the Better Business Bureau.
It writes loans in Florida, Georgia, Tennessee, South Carolina, North Carolina, Virginia, Maryland, Delaware and Texas.
In order to qualify for either jumbo mortgage option from Gateway, you'll need:
- A credit score of 740 or higher.
- A down payment of 25% or more if you're buying a home.
- At least 25% equity in your home if you're refinancing.
- To take out a loan from $475,000 to $2.5 million.
Mortgage rates hit bottom in May 2013, falling to an average of 3.93% for a 30-year, fixed-rate jumbo mortgage. Just four months later, in September, the average rate on a 30-year jumbo climbed almost a full percentage point to 4.89%, but it has slowly fallen back to 4.33% this month.
Indeed, mortgage rates have defied all expectations that home loans would get more expensive this year. Actually, they've gotten a little cheaper since the start of 2014.
But even if rates do climb later this year, as many experts expect, mortgage rates will remain well below their historical average, making financing a house or condo still relatively cheap.
Just remember that if you decide to go with an ARM over a fixed-rate loan, it's important to check interest rate caps before you sign up.
Some ARMs can jump by as much as five percentage points when they first adjust.
This jumbo ARM deal from Gateway won't do that. Its interest rate caps are 2/2/6, which means that your interest rate can't go up more than:
- 2 percentage points when it first adjusts in five years.
- 2 percentage points each year after that.
- A total of 6 percentage points over the life of the loan.
The true amount of the change depends on where interest rates are at that time, but it's extremely unlikely that rates will be any lower than they are right now.
In fact, it's almost a guarantee that rates will be higher when this loan first adjusts in five years.
That means your rate could hit 4.875% at the first adjustment, 6.875% at the second adjustment and max out at 8.875%.
Like most adjustable-rate mortgages, this deal is best suited for borrowers planning to sell, or at least refinance, before the first or second adjustment, depending on where rates are at that time.
In case you can't, it's important to make sure you can still afford the monthly payments if you're stuck with this jumbo ARM for more than five years.