The high cost of jumbo mortgages

The increase in jumbo loan rates is yet another consequence of the mortgage crisis. Because of the increase in delinquencies and foreclosures, investors are jittery about buying mortgage loans that don't conform to guidelines issued by Fannie Mae and Freddie Mac, institutions that buy mortgages from the lenders. So lenders had to raise the rates on jumbo mortgages to entice investors.Since Long Island home prices are among the highest in the nation, borrowers here are feeling the fallout -- especially in Nassau, where the median closing price of $461,500 is in jumbo territory, experts said. The wider differential can add hundreds of dollars to monthly payments, forcing some would-be homebuyers to defer their dream and others to scurry to find ways to lessen the burden."There are a lot of people who are holding back on purchases," said Paul Schwartz, a certified mortgage planning specialist with Blackstone Mortgage Corp. in Woodbury. "People are waiting to accumulate bigger downpayments." Mortgage brokers say they are working with clients to find solutions. Among the options they're offering are these:-- Breaking the mortgage up into two loans-- Paying points up front to reduce the loan rate-- Negotiating harder with the sellerto lower the sale price.-- Making a bigger downpayment.It's best to run the numbers first on the different ways to structure the loan to see what's most affordable for the borrower, brokers say."The smartest way to do it is to compare" breaking the mortgage into two loans and paying points," said David Blumenthal