Is there anyway around paying 1% higher for a Jumbo Mortgage?

I was looking to put down $120K on a house and get a mortgage for $480K. I was told that would be a jumbo and I would have to pay 7%+ instead of 6%+. I would like to avoid cashing out my investments to put more money down.

There's usually a way around:

You could take out a second mortgage for $63,000 (the difference between conforming and jumbo loan). That loan would have a higher interest rate than the jumbo though, but since it's only for $63,000, it would still probably be to your advantage. Especially if you pay off the second mortgage faster (through extra payments).

I hope that helps.

Ummmm. Buy a lesser house?

Yes Jumbo rates are ususally higher with conforming loans because it is a higher dollar amount at risk. You could do a second mortgage along with it to keep the first lower, however the interest rate for a second is usually higher. Youre getting a good deal with 7% as long as you are not paying points.

There arent many lenders who are lending for jumbo mortgages. You might want to look at an ARM....there are some jumbo lenders that have a lower rate for 3/1 ARMS compared to a 30yr fixed.

good luck!