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Borrowers shift toward jumbo loans, ARMs as mortgage rates rise

Rate and affordability pressures continue to challenge purchase lending, driving homebuyers to alternative loan products.

The number of rate locks was down in February from the previous month, but dollar volume rose due to a rate environment that favored non-conforming loans including jumbo loans and adjustable-rate mortgages (ARMs), according to Black Knight’s originations market report.

Pipeline data from February showed overall rate lock dollar volume up 2% from January, with purchase locks rising 4%. Meanwhile, cash-out refinances fell 11% and rate/term refinances remained near historic lows, according to Black Knight’s originations market report.

Combined, refinance locks details ⇒

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