Mortgage Terms Are Easing – Including Luxury Homes
While the real estate market in Bergen County has been recovering nicely since late last year, sales of high end homes had been one of the less robust parts of the market. This was due in large part to mortgage financing which all but disappeared in 2008 and then was burdened with simply objectionable terms.
Jumbo loans and super jumbo loans were not only hard to get but their down payment requirements went through the roof. If you wanted to purchase a $2 million house you had to come up with as much as a 50% down payment. Requirements of 40-45% were standard for up to $2 million purchases. This has now changed.
Today I can report to you that only a 20% down payment is required for $1-2 million homes and just a 25% down payment for a $2-3 million purchase. Of course this assumes the buyer is qualified as to credit, assets, etc.
This change bodes well for affluent buyers and the luxury home market. With more liberal jumbo loan financing the market for high end luxury homes is now becoming more active. According to the New Jersey MLS data, we have an 18% increase in the number of homes sold at $2 million or above for the first 4 months of this year. Better mortgage loan terms for luxury home buyers is indeed positive for the Bergen County real estate market.
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