In the past few months, banks and lenders have been getting many requests for home loans ranging anywhere from $1 million to $10 million. Traditionally, $1 million-plus homes would be purchased with cash by affluent buyers, but getting a jumbo mortgage is now a popular option.
As mortgage rates are currently so low, it makes more sense for many Americans to get a $1 million-plus mortgage rather than liquidating their investments to pay for a new home. Bloomberg reports that with a stock market gain of 7 percent this year, buyers can save money by strategically borrowing.
Many buyers are deciding to get adjustable rate jumbo loans, especially if they are only planning on staying in the home for a few years. An adjustable rate can significantly lower the monthly payment, and lenders such as loanDepot offer jumbo loans in a variety of term lengths for up to $2 million.
Borrowers are afraid that rates will so start to go up soon, so there is a rush to either get a jumbo loan now or to refinance at today’s lower rates. Some lenders are trying to get wealthy borrowers to build a long term relationships with them, especially as credit standards have raised in the past few years.
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