One of the positive signs of America’s economic recovery from the COVID-19 pandemic is the continued strength of the housing market. While uncertainty has plagued some sector’s of the nation’s economy, real estate has remained a bulwark against a broader economic downturn over the last 18 months. This strength in the market has and will continue to provide good opportunities for prospective mortgage borrowers, especially those looking for jumbo loans on higher-priced properties. Let’s take a look at how jumbo loans have changed during recent months, and why they continue to offer great value for purchasers during this time.
LESS MONEY DOWN
There is a great deal of variability when it comes to down payments for jumbo loans, depending on the overall cost of a property and the personal financials of the borrower. One recent track we have noticed at Mortgage Maestro Group Group is that jumbo loans are trending towards as little as a 3.5% down payment for a $1.5 million loan, or 5% for a $1.75 million loan. This optimistic trend in required down payments is great news if you are in the market for a jumbo loan. Putting less money down up front boosts many of the traditional benefits of these loans. Couple that with historically low borrowing rates, and it is easy to see why there continues to be so much interest in mortgages that offer less money down up front.
LET YOUR MONEY WORK FOR YOUR FAMILY
What are the benefits of being able to put less money down? Most importantly, this allows buyers to let their saved funds continue to keep working for them. Rather than liquidating retirement accounts, brokerage funds, crypto holdings in order to meet a 20 percent down payment, that money can stay where it is, accruing interest and eliminating costly transfer fees. Financial flexibility has always been a hallmark of jumbo loans, and those benefits have become even more apparent over the last year. Now more than ever before, jumbo loans offer an opportunity to leverage existing funds into real asset building wealth mechanisms thanks to low down payment options being made available.
Liquid assets, including a wide range of bank savings or brokerage accounts, can sometimes be used as income for mortgage qualification on jumbo loans. This means that in addition to putting less money down thanks to reduced requirements, new buyers may be eligible for these loans thanks to a burgeoning stock market. With the S&P 500 continuing to rise to all-time records in the wake of COVID-19, your stock portfolio may be the key to securing a jumbo loan. Our experts at Mortgage Maestro Group will be happy to take a look at your personal finances to see if you are newly qualified.
While conventional mortgage lenders will often require private mortgage insurance (PMI) on loans with less money down, jumbo loans can often be made without the need for PMI. Depending on the loan-to-value rate you are able to finalize for your mortgage contract, it may be possible to avoid extra costs like PMI, which will once again help you to leverage existing funds into future growth through real estate.
Have questions? Contact the team at Mortgage Maestro Group!