You can save about 100 bps by waiting for the extended limits for jumbos to kick in:

Hurdles for Jumbo Borrowers

by Jennifer Woods

For starters, if you’re looking in certain high-cost metropolitan areas such as New York, Los Angeles, Boston or San Francisco, you may want to sit tight for a few weeks.

That’s because a measure in the fiscal stimulus package recently signed into law by President Bush that will temporarily change the guidelines on what constitutes a jumbo mortgage.

As it stands, mortgages above $417,000 on single-family homes are considered “jumbo” , or non-conforming, in that they are not backed by federal mortgage entities, and carry higher rates than conforming mortgages which are below $417,000.

The new bill, however, allows that amount to be bumped up — in some areas to as much as about $729,750. The actual guidelines were set March 6 by the Department of Housing and Urban Development.

“It makes huge sense to wait [for the guidelines to be determined] said Fenton Soliz, president and chief executive of Mortgage Experts. “You might qualify for substantially more money at a lower rate,” he said.

The current average for a 30-year fixed mortgage is 5.90 percent, compared to 6.88 percent for a 30-year fixed jumbo mortgage.