The resurgence of real estate markets over the past few years has brought about an unusual situation. While interest rates on conventional loans are still unbelievably low, new lending guidelines are making it a bit more difficult to approve a loan. At the same time, the number of jumbo mortgagescontinues to climb each month as buyers move up in property and take advantage of distinct advantages not offered by typical lending.
Jumbo Loans Can Accommodate Various Repayment Plans
While conventional loans are offered with adjustable rates, the vast majority of the loans are closed with a fixed term and fixed rate. However, jumbo mortgages are just the opposite.
A jumbo loan can be closed with an ARM that is fixed for 1 year up to 10 years. Interest-only options are also available for people who have fluctuating incomes and can afford a modest payment each year and then pay a large amount towards principal once or twice a year.
In addition, self-employed business owners or investors that make their money from real estate and stocks can have a tough time passing the stringent rules of a conventional loan. Jumbo loans are not as strict on the type of income used so long as it can be accurately verified.
Can be Beneficial for High worth Individuals
One of the biggest attractions to people with high net worth is the combination of the low rates available on jumbo mortgages along with the shrinking down payment requirements. People who have $100,000 or more in liquid assets can now pay between 5% and 10% as a down payment on a home and put the remaining money in their investment portfolio.
Obviously, there are some buyers that will not be able to take advantage of the jumbo mortgage. However, for the people who have prospered over the years from their own business or wise investments, this is a great time to take advantage of low rates and flexible terms for a truly dream house.
If you’re interested in learning more, contact my office at 702.331.8185.