How to purchase a $700K house and save 1% on your interest rate!!

Kyle Corum (Kyle): Hey, Everyone.  Kyle Corum here with Windemere Real Estate Professionals.  I’m here with Braiden Shaw.  Braiden, how are you?

Braiden Shaw (Braiden): Good.  How are you doing?

Kyle: Good.  Tell everybody a little bit about yourself if they’re not familiar with you.

Braiden: I’m Braiden Shaw.  I’m with a company called “Innovative Mortgage Alliance.”  We’re based out of Eagle, and we’re a mortgage broker that offers refinances, purchases, and everything like that.

Kyle: Fantastic.  Today, we wanted to talk to you about a jumbo loan product that they’re offering.  To start, let’s give people a refresher course on jumbo parameters.

Braiden: Yeah.  A jumbo loan, what that means is, it’s basically higher priced homes. To get a mortgage up in the $500,000 range and up, you have to get what is called a “jumbo loan.”  And because it is a bigger loan, the banks take on more risk.  And, so, what they do is, they bump up the interest rate.  So, interest rates right now, for a jumbo loan, are right around 5%, somewhere in that region, to get normal closing costs.

Kyle: What kind of loan limits as far as price points are we looking at with jumbo?

Braiden: For jumbo, it’s anything above $484,000, and then you can go as high as you want.  You can go into the millions.  The higher you go, the bigger interest rate you’re going to get, but that’s where the parameters are at.

Kyle: And, today, we wanted to talk about a product that you guys are offering.  As far as I know, you’re the only one offering it in Idaho.

Braiden: Yeah.  We are one of the few.

Kyle: Tell me a little bit about that.

Braiden: So, it’s called “Nationwide High Balance.”  And what it is, there’s a regulatory body that kind of manages mortgages – Freddie or Fannie Mae.  And for years, they’ve set the conforming conventional loan limit at that $484,000 that we were talking about.  They’re exploring a new idea to bump that limit up to $725,000.  What that means for the consumer is, now you can get those interest rates you see on TV, the 3.8 to 4.0 percent range, for those jumbo loan products.  You can save one percent in interest rate, which is huge for these new products.  And it will save you tens of thousands of dollars.  It’s a great idea.  I love when they release the regulation a little bit and let us save the consumers money.

Kyle: Yeah.  That’s huge.  One percent, back in the mortgage day, that was kind of a go-to if you guys were wanting to refinance but being able to come into a purchase and still save that one percent compared to everybody else, that’s going to be a huge monthly savings.  You’ve put together a comparison for us, right?

Braiden: Yeah.  I ran this this morning.  If you were to get a 4% with this new product, your payment would be right around $3,000.  But if you were to go to a bank and try to get that same interest rate, you’d come out almost a percent above.  So, the new product would be 4%.  If you were to go to a bank and get a jumbo loan, it would be at 4.875%.  So, what that means, it means in the end that you’d save about $60,000 over the course of just 10 years in interest payments alone.  It’s like you said…

Kyle: That’s huge.

Braiden: Yeah.  To save that 1% saves you a ton of money.  And to get that on your initial purchase, not to refinance down to that is amazing.

Kyle: Really.  So, monthly, what does that kind of boil down to, monthly payment savings?

Braiden: You’d save $360,000.  Errrr, $360.

Kyle: $360,000 would be nice.

Braiden: $360 a month in interest you’d save with this new product.

Kyle: That’s great.  So, Guys, if you’re looking to getting into a house, purchasing in the area, give one of us a call.  We’ll put our contact information in the comments below.  But, yeah, we’d love to set you up with this program and discuss it a little bit more.

Braiden: Yeah. Thank you.

Kyle: Thank you.