In accordance with a new jumbo loan program, we break down a lending example below for home buyers in the high cost home markets.
Financing scenario: Purchase Price: $2 million;
First loan: 80 percent loan-to-value (LTV) maximum,
Second loan: 5 percent; combined LTV of 85% for 15% down payment.
Time to close 25-day lender guarantee
First loan: $1.6 million loan. 7-year ARM (adjustable rate mortgage), interest-only payments along with fix rate conversion option.
Second loan: $100,000
Guidelines: Borrower must have a 740 credit score or above along with 18 months of liquid assets in reserves.
Property usage: ONLY primary residence (single-family or planned unit development (PUD).
Who is this loan best for? It is an excellent loan for borrowers who want to take advantage of leverage on a super jumbo home purchase. Most people would be ecstatic or content by just having the interest-only payment option coupled with a 20-percent down payment. This loan product really helps move-up buyers too since less up front cash is required. It can especially handy in high cost west coast cities like Los Angeles, San Diego, Seattle or San Francisco or Scottsdale, AZ.
How does it work? After the 7-year fixed rate period is up, and at the beginning of years 8, 9, 10, 11 or 12, the buyer can choose to convert their existing adjustable rate mortgage to a permanent fixed rate. This works on 5 and 10-year fixed ARMs as well. All the borrower has to do is simply call the lender to check the details and apply the feature.
To get started with a loan like this, just apply by clicking on the yellow button on the right and a loan originator will contact you.