Posted 11.3.16 @ 0:0
Many lenders across Canada are easing the 20% minimum down payment for wealthy borrowers, but what does this mean for you? How wealthy is wealthy? If you’re getting a jumbo mortgage for million dollar homes you might be surprised at the perks lenders are willing to offer you. Depending on the value of the home, you may even be able to get your down payment as low as 10%.
Many Lenders Asking for 15%
While traditional lenders want 20% or borrowers run the risk of dealing with private mortgage insurance, many lenders are starting to waive PMI down to a 15% minimum down payment on luxury homes valued at more than $1m.
With the market beginning to cool after a long, long stretch of price jumps over the last two years, many lenders have their eyes on the luxury market to replace a lower volume of homebuyers investing in homes under $1m.
Risk of a Hard Landing Has Subsided
Most economists claim that the risk of a “hard landing” for the housing market has now passed. Home prices haven’t declined – they’re actually continuing to climb. This is encouraging lenders to continue to lend, especially for wealthy homebuyers seeking to buy luxury homes for sale.
While the massive increases in home sales and sale prices are starting to cool, home prices are expected to continue to rise in the time to come – but that’s just with residential homes. When it comes to luxury real estate, the sky is truly the limit. With a tighter inventory and a higher desirability, prices and sales will continue to climb.
Competition Fierce Among Lenders
Competition for the hot luxury market is fierce – so if you’re a wealthy homebuyer looking at luxury real estate, you’re in luck. You’re going to have your pick when it comes to getting a mortgage.
Many lenders are going to try and outdo one another with competitive mortgage rates and even terms that would have been unheard of just a year ago. Everyone knows that the minimum down payment for a mortgage is usually 20%. Many lenders are willing to overlook this to get your business and it can save you big.
If you’re buying a $2m home for example, if you had to pay 20% upfront you would have to pay $400,000 for your down payment. But if you had a 15% down payment, you would only need $300,000 down. Imagine all you could do with that extra $100,000 – putting it towards your mortgage is probably the best idea, but that’s always up to you!
High Credit Scores are Still a Requirement
But no matter how wealthy you may be, a great FICO score is still a requirement when it comes to getting a mortgage. You’ll still want to make sure that you keep your credit as pristine as possible to get the best rate.
For great luxury real estate in Oakville, visit our 'Find a Home' page here: http://www.goodalemillerteam.com/Homes.aspx