Where readers ask and we (the community) try to answer.
Can you have someone, maybe “the banker”, speak to the loan environment and requirements for loans on homes over 1 million dollars? Thanks.
Banker? You reading? You can either send us your answer via email, or post in the comments and we’ll cut/paste to the front.
[Update: It took him all day ;-), but “the banker” chimed in…]
Jumbos are certainly still available and with a watchful eye and the right advice, the pricing is not absurd at certain institutions. The number that seems to be consistent with Jumbo Financing is a 70% Loan To Value, perhaps some banks may max out at 75%, but most counties are considered to be declining market and stuck at 70%. In terms of product types, these are few, 30 year fixed and a 5 year Arm may be the only two choices left. Within the fixed and adjustable choice, there may be a few interest only options to choose from.
Standard credit requirements are at least 720, Full income verification, and strong asset position, at least 6 months to 12 months of reserves.
Jumbo rates have been all over the board, but I have recently seen mid 5’s, no points, standard Bank fees. But, this is a Bank Loan. . .I am not certain Mortgage Brokers have many options on the Jumbo side of the game as many of there vendors have ceased making this type of loan or have shut down completely.
As we continue to see falling prices, this will be one of the most “cautiously monitored” loans, but as updates occur. . .I will make sure to post.
Thanks!
Conforming jumbos are currently 625,500 and i think they require a down of about 25-30%. Regular jumbos are still absurdly expensive. I think the best route is to take out a conforming jumbo and a home equity loan (can go to about 300k) that is currently in the 4% rate range. The HE loans are floating though and should probably be repaid in a few years when rates start rising again. But this will only get you a 1.3mm home if you’re putting 30% down :(
I just got a $1.6M refi for a 6 unit building at 1.13 debt service, 70% ltv, 1 point, 7.75% interest only for 4 years. Sucks but better than no loan… took me about 4 months to finally accept that I was not going to get better. I had several LOI’s on 6.5% but each one would fall through.
I realize that you are asking about single fam, but thought this info would be relevant.
“Conforming jumbos are currently 625,500 and i think they require a down of about 25-30%. ”
I don’t think so. Super conforming is limited at that number, and under, true. But the loan is available for 20% down.
what is super conforming?
http://www.freddiemac.com/sell/guide/bulletins/pdf/bll086.pdf
“Super conforming” is the actual language used by the institutions who carry the loans.
Jumbos are certainly still available and with a watchful eye and the right advice, the pricing is not absurd at certain institutions. The number that seems to be consistent with Jumbo Financing is a 70% Loan To Value, perhaps some banks may max out at 75%, but most counties are considered to be declining market and stuck at 70%. In terms of product types, these are few, 30 year fixed and a 5 year Arm may be the only two choices left. Within the fixed and adjustable choice, there may be a few interest only options to choose from.
Standard credit requirements are at least 720, Full income verification, and strong asset position, at least 6 months to 12 months of reserves.
Jumbo rates have been all over the board, but I have recently seen mid 5’s, no points, standard Bank fees. But, this is a Bank Loan. . .I am not certain Mortgage Brokers have many options on the Jumbo side of the game as many of there vendors have ceased making this type of loan or have shut down completely.
As we continue to see falling prices, this will be one of the most “cautiously monitored” loans, but as updates occur. . .I will make sure to post.
so need to put $250k down on a 1 mil house and verify that you have the income to pay it off. What income/asset position do you need to show for the $750k ?
You would need 6 months of reserves, and ratios would need to be below 45%. That close to 729,000$ loan amount. . .my advice would be to wait and see how the new stimulus package affect loan amounts.