For as long as I can remember, the term “jumbo mortgage” was a bad word. Time and time again buyers would scrape and scrape together money to increase their down payment enough to meet the $417,000 conforming conventional loan maximum.
But in an interest turn of affairs, the jumbo mortgage may very well be coming back in popularity. You see, right now, it’s actually sometimes *cheaper* to take out a jumbo mortgage and borrow more money.
Let me repeat that: It’s sometimes cheaper to take out a jumbo mortgage.
Let me give you a recent example from clients of mine. They were looking to purchase a $450-475,000 house with 15% down payment. That would have been a conventional loan and since they were putting down less than 20%, they would have been assessed private mortgage insurance, or PMI – a monthly fee that is assessed until a buyer has at least 20% equity in their house.
Conversely, their lender informed them that if they purchased a house for slightly more – $491,000 to be exact – in a jumbo mortgage with 15% down payment but no PMI – they would be paying $200 less per month.
So, they could afford more house and lower their payment. The only increase was in down payment. For reference, that difference between their down payment at $475K and $491K was $2,400.
So for all of those buyers who are having trouble finding what they want – especially those seeking 3 bedroom condos/townhomes in the ever-popular Chicago neighborhoods of Lake View, Wicker Park, Bucktown, West Loop and Logan Square – may I suggest you look towards a jumbo loan? It really could make all the difference in getting the house you want!
To learn more, for a referral to a qualified loan professional who could walk you through options with a jumbo mortgage, or for questions about buying a home in Chicago, contact me: firstname.lastname@example.org.