Borrowing money for luxury real estate just got cheaper. Typically money borrowed for luxury real estate is considered a jumbo loan, a loan of more than $729,750. Jumbo loans traditionally hold higher interest rates and are not backed by government sponsored agencies. The current interest rate for a jumbo loan is 5.48%, rivaling those of traditional 30 year fixed rate mortgages.

The low rates for jumbo loans make purchasing luxury real estate much more affordable than in recent years. Currently luxury home values are lower than they have been, combine that with the low interest rates and thousands, if not hundreds of thousands, of dollars can be saved over the lifetime of a loan, adding to the affordability level.

The housing recovery has focused on the lower end of real estate, through tax credits and low mortgage rates. The new low rates for jumbo mortgages should give the higher end a well-needed boost. The luxury real estate market is certain to get a lift from the newly reduced interest rates, luring both buyers and lenders.

Click here to read a recent article from the Wall Street Journal on low jumbo rates.

 

Contributed by Mario Romero, CRS, CDPE, CLHMS
602-252-4191 office, 602-254-9810 fax
The Romero Team - Melcher Agency
www.TheRomeroTeam.com
www.ShortSaleTeamAz.com
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