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What is a conforming mortgage

what is a conforming mortgage

The Narrowing Gap between Jumbo and Conforming Mortgage Rates

With conforming mortgage rates trending higher largely due to the end of Fed’s support of keeping mortgage rates at QE artificially sweet low levels, we’re seeing less difference between conforming mortgage rates and non-conforming mortgage rates (aka Jumbo mortgages).  In most Washington state counties, a jumbo mortgage is any loan over $417,000 (for a single family dwelling).  In the greater Seattle area (King, Pierce and Snohomish counties) we have “conforming high balance” mortgages which will allow loan amounts from $417,001 to $506,000 before it’s considered a non-conforming (or jumbo) mortgage. Here’s a link to 2013 Washington State conforming loan limits.

There’s no better way for me to illustrate the shrinking gap between conforming and non-conforming rates than to provide you with current rate quotes. I’m including a couple different price points as due to LO Comp, we don’t have pricing set at flat “par” or 1% (with exception to the loan programs offered through Washington State Housing Finance Commission, like Home Advantage ). Pricing below is based on what is available to me based on the lenders we currently work with. We do not charge origination points. Discount points are the only “points” that we charge. You can have your rate priced with or without points or with rebate pricing (credit towards closing cost).

Rates quoted below are as of 8:00 am on September 5, 2013 and may (and with today’s volatility WILL) change at any moment. If you would like me to provide you with a current rate quote for your home located

anywhere in Washington state, click here.

Rates below are based on a purchase in the greater Seattle area of a single family detached dwelling with credit scores of 740 or higher and a 20% down payment closing on or before October 11, 2013.

Conforming 30 Year Fixed (loan amount up to $417,000)

  • 4.625% (apr 4.836%) priced with 1.571 points
  • 4.750% (apr 4.885%) priced with 0.694 points
  • 4.875% (apr 4.958%) priced with 0.099 points

Conforming High Balance 30 Year Fixed (loan amount from $417,001 to $506,000)

  • 4.875% (apr 5.061%) priced with 1.230 points
  • 5.000% (apr 5.170%) priced with 1.028 points
  • 5.125% (apr 5.220%) priced with 0.205 points

Non-conforming (aka Jumbo) 30 Year Fixed (loan amounts above $506,000)

  • 4.875% (apr 1.236%) priced with 1.236 points
  • 5.000% (apr 5.122%) priced with 0.736 points
  • 5.125% (apr 5.204%) priced with 0.068 points

Pricing between conforming high balance and jumbo mortgages for a 30 year fixed rate are currently essentially the same. In fact, at some price points, the jumbo rates are slightly more attractive than conforming high balance! “True conforming” rates (loan amounts $417,000 and lower) are priced around 0.25% better in rate or roughly 1 point better in fee than conforming high balance/jumbo rates.

Remember, by the time I’ve published this post or when you’re reading this post, these rates may have changed. If you would like current rates for your home located in Washington state, please click here .

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