Luxury Home Loan Financing - Loan amounts for luxury homes can range from the mid $500,000 to $25,000,000 dollars or more. The higher the loan amount, the lesser the pool of available lending institutions.
Luxury home loans are usually associated with jumbo and super jumbo loans. There are a few niche lenders that specialize in this type of financing. Luxury home loans will require at least 20% equity due to the high risk associated with these type of loans.
Luxury Home Loans usually have a maximum Loan-to-Value you can borrow.
Super Jumbo mortgages are generally classified as mortgages larger than $650,000. While banks and most conventional lenders struggle to offer competitive super jumbo mortgages for high net worth home owners and luxury home buyers, a financing advisor specializing in super jumbo mortgages can arrange financing for properties ranging from $1 Million to $20 Million or more. For more information about super jumbo mortgage refinancing or obtaining a multi million dollar mortgage to purchase a luxury home, please contact an advisor at 888-418-4467 or via email info@TheMortgageU.com .
Jumbo ARMs are usually the most attractive option for Luxury Home Buyers. Most well to do buyers like to use leverage and keep their money working in the market rather than paying down the principal of their home.
Usually you can expect to pay a higher interest rate on a high end home or a luxury home. As you are borrowing more money the risk becomes greater to the lender that is lending the money. If you were to borrow 15 million dollars to buy a home worth 20 million there is still a lot of risk involved to the lender even though you have put a 5 million dollar down payment down. As the loan and homes get more expensive, the percentage of consumers that can afford a home that expensive decreases substantially which could make it harder for a lender to resell in the event a default on the loan.
Luxury home loans facilitate the high-end purchase of expensive homes, vacation homes, investment property. They are quite attractive for primary occupants or investors who want to leverage their assets.
Lower interest rates in recent years have made luxury homes an attractive investment. Strong appreciation has encouraged borrowers to take on larger loan sizes.
For the year 2006, the conventional loan limit for one-unit properties is $417,000. Any single loan larger than that amount is considered a jumbo loan, and will have a higher interest rate.
Typically luxury home mortgages are a bit more conservative on the loan to value. Be prepared to need a downpayment of 20-30% of the homes value when purchasing a luxury home with a super jumbo mortgage.
When applying for a super jumbo loan, most lenders like to see liquid assets available after closing. These assets can be stocks, 401k's, IRA's, or any financial account that has a cash value. Most lenders like to see at a minimum 6 months, and as much as 36 months of mortgage payments including Principal, Interest, Taxes and Insurances in reserves.
If you are able to make a down payment large enough to reduce your principle loan amount to less than $417,000 you will qualify for better interest rates because the loan amount is within conforming limits. If you decide to take a jumbo loan keep in mind that when the loan amount is low enough you may be able to save thousands in interest payments by refinancing into a conforming loan.
Luxury Home Loans - If the mortgage loan you are seeking exceeds $1,000,000, it will be best to seek assistance from a mortgage professional that specializes in large loan limits and guidelines. As a Luxury Loan Specialist, I am familiar with specific guidelines and pricing associated with super-jumbo loans.
A Super Jumbo Mortgage is generally defined as having a principal balance of $650,000 or more. Super Jumbo mortgage loans are primarily used in the purchase and refinance of luxury homes and other high value residential real estate.
Super Jumbo Loans are available up to 100% of the property's value depending upon your credit score and documentation requirements (Full Doc, Stated, No Income No Assets).
Despite popular opinion, there are super-jumbo loans for self-employed borrowers who cannot prove their income. 100% loans are still available, usually only requiring a few months' payments among the borrower's assets.
Many super jumbo loans look for assets in reserves after your loan closes. The assets you can show, the better your loan terms will be. Asset reserves can be an IRA, 401(k), or any other financial account.
Super Jumbo loans are usually for individuals with a high net worth and excellent credit history.