In the tristate area, a jumbo loan is defined as borrowing more than $729,750.

In a city where the priciest home to hit the market last week was a 10-bedroom townhouse at 1016 Madison going for $72 million, it shouldn’t surprise anyone that lenders have decided to make it easier to qualify for these loans, in addition to bringing down the rates.

The New York Times reports that real estate brokers are hopeful.  Frederick Wohlfarth, president of Wohlfarth & Associates, said he has already seen a 40% rise in sales requiring jumbo loans over last year.  Dottie Herman, the chief executive of Prudential Douglas Elliman, told the Times that she is “cautiously optimistic.”

However, NYC buyers beware: Dr. Dennis R. Capozza, a principal of University Financial Associates in Ann Arbor, Mich., put together an index that gauged the default risk for borrowers in every ZIP code in the nation.  NYC scored around 410 compared to a statewide rating of 206.  The good news is that this number is down from a high of 540 in 2007; the bad news is that with its “overpriced real estate, falling house prices, high unemployment” and other factors, Dr. Capozza does not believe that it is “a good time to be a mortgage lender in New York City.”

However, Dr. Capozza said that jumbo borrowers could be the first to recognize improvements in the overall mortgage market, partly because they have not had the benefits of a government-subsidized mortgage market with its historically low rates.  Alan Rosenbaum, the chief executive of the Guardhill Financial Corporation, a Manhattan mortgage broker, supports this theory and states that he has “witnessed more lenders appearing recently, as they should,” he said. “A jumbo loan is one of the safest loans if standard underwriting guidelines are adhered to.”

Typically, if you borrow based on an 80% LTV, the threshold purchase price for a Jumbo Loan is approximately $912,188. With that purchase price, ask us how can you save over $5,000 when you buy with CondoDomain.