How to Get a Jumbo Mortgage When Rates Are Rising

SPEAKER_1 (0:00)

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Michael Zuber (0:30)

All righty, folks, lots of exciting things going on in the mortgage market. Always love talking to Stephen Dow from Velocity Mortgages because Velocity has always been and always will be a make sense lender. They did a couple of things in the last week that I think is interesting. One, they released a super jumbo product. Six million plus, baby, we'll talk about that. We'll also talk about some adjustments in rates. They actually lowered rates at the high end of credit, which is really cool given the Fed just raised rates. Some people might be shocked by that. But before we get into all of that goodness, Stephen, please do that marketing thing so we don't get in trouble.

Stephen Dow (1:07)

Thank you, sir. Again, although I work very happily for Velocity and Maurice Capital, all the ideas and topics discussed on this channel, that of my own, so let's get another one going.

Michael Zuber (1:15)

So we'll get into the super jumbo in a minute because I think there's going to be a lot more discussions there. But given that the Fed just raised rates, we should ask you, and I already know the answer because I kind of led with it at the beginning. Did you raise rates because the Fed did, or did Velocity do something different?

Stephen Dow (1:32)

No, we kind of went a little different. I mean, our rates actually, the new guidelines and matrix came out on Monday even before the Fed meeting. And on the upper echelon at 715 above FICO score, our rates went down anywhere from an 8th to a quarter.

Michael Zuber (1:45)

Oh, wow.

Stephen Dow (1:47)

But on the lower pricing tier, as far as like 620 and below, it went up a little bit.

Michael Zuber (1:53)

Yeah, a little more risk there, I would say.

Stephen Dow (1:55)

Right, right. But whereas before, you needed a minimum 650 FICO to get up to 75% on the purchase, I technically can go down to 600 FICO, just as long as there's no BKs in the last 24 months, and no mortgage rates. But consumer credit, you know, delinquencies, things of that nature, that's going to be okay.

So technically, I get the 75% LTV with a 600 FICO, no ratio. Yeah.

Michael Zuber (2:17)

Yeah, pretty crazy. Again, I want to hit one more time, we'll get into the super jumbo. Again, on Monday, you rolled out for the higher credit, rates went down, which really probably blows people's minds when, you know, conventional is up at seven, you know, seven and a quarter, seemingly going higher, velocity being a makes and cylinders like, no, we're seeing, you know, good buyers, good activity, we're going to lower rates a quarter to an eighth. So, you know, that just shows that velocity is different, I think.

Stephen Dow (2:42)

Well, again, we don't try to follow the herd, so to speak. And I think on the conventional side, I think the profit margin is a little bit skinnier.

Michael Zuber (2:51)

Sure.

Stephen Dow (2:52)

And so, you know, when the Fed or the bond market treasury moves, knee jerk reaction, with us, we got some wiggle room. You know what I mean? We can kind of make it and structure our pricing a little differently, given what the environment is like on the secondary market. You know, very cool. They're liking our paper, and it's performing well. We can make some aggressive moves, where other people are kind of sticking to the plan of, hey, rates are going up, everybody's going up, I got to go up.

Well, let's talk about the Super Jumbo.

Michael Zuber (3:22)

Yeah, let's talk about the Super Jumbo product. First, define what it is, give the ranges.

I don't think people really understand what a Super Jumbo is. So, do me a favor, give the kind of guidelines of a Super Jumbo loan. Sure.

Stephen Dow (3:34)

So, Super Jumbo, in our definition, is basically anywhere from $6 million to $10 million, as far as the loan amount for non-owner occupied residential. Typically speaking, that's Jumbo, baby.

Michael Zuber (3:47)

That is Super Jumbo.