SHOULD PRESIDENT OBAMA REFINANCE HIS CHICAGO HOME MORTGAGE? Experts say "No!"
LIKELY NOT MUCH SAVINGS LIKELY IF PRESIDENT AND FIRST LADY RE-FI MORTGAGE ON THEIR CHICAGO HOME!
President Obama's family home, at the corner of Hyde Park Boulevard and Greenwood Avenue in the Kenwood Neighborhood on the South Side of Chicago, is Stately! Conveniently Located! Considerably Updated!
And it has a nearly $1.3 Million Jumbo Mortgage, which The Obama's used to purchase their $1.65 Million home back in 2005! Their interest rate - 5.625%, high by today's conforming loan average of 4.87%. (See Tribune Reporter John McCormick's story in today's Chicago Tribune for more details.)
But a mortgage that big is considered a "jumbo loan," with current jumbo rates far higher than the conforming-loan average. Indeed, according to some experts, re-financing that loan now might not save the First Family that much money each month!
To be sure, it appears as if the President did enjoy a bit of a break on the rate. When they purchased four years ago, average rates for these "super jumbo" loans, as many lenders refer to them, were between 5.93 and 6.00 percent, according to historical rate data. At the time, however, the Obama Family had very large savings accounts at the Northern Trust Bank in Chicago. According to industry insiders, more competitive rates are common among a bank's highest-tier customers, with sizable-balance accounts.
A White House Spokesman has declined to comment on whether Barack and Michelle Obama have considered refinancing. However, one lender, Jim Brady of PrivateBank Mortgage in Chicago, advises the President to stand pat, as competitive rates for similar large mortgage loans are not much cheaper. And, by historic standards, the rate on the Obama loan is quite competitive.
It is possible the Obama's can pay down their loan balance to below $417,000, in order to qualify for a lower-rate conforming loan. But this would involve a pay-down of at least $600,000, and Brady cautioned against liquidating that much cash to pay down a competitive mortgage rate loan.
DEAN & DEAN'S TEAM CHICAGO
