The Anna Maria Island Sun Newspaper

Vol. 13 No. 7 - November 28, 2012

REAL ESTATE

Jumbo mortgages for luxury property

 

Jumbo is back in style, and I don’t mean Jumbo the elephant or jumbo jets. What I do mean are jumbo mortgages that are making a comeback in spite of our tepid housing recovery.

A jumbo mortgage, for those of us who never had to inquire about such things, is a mortgage in an amount above conventional conforming loan limits. The conforming loan limits are set by the two government sponsored enterprises Fannie Mae and Freddie Mac, which set the limit on the maximum value of any individual mortgage they will purchase from a lender. The current Fannie Mae/Freddie Mac limit is $417,000, which means that in most of the country, private market financing is needed for loans in excess of this. There is a higher government cutoff point in certain high cost areas.

Since jumbo mortgages are generally a higher risk to the lender, especially since these loans are too big to be sold to Fannie Mae and Freddie Mac, the interest rates are higher as well. The current rates are anywhere between a half to a full point higher, but at today's extremely low interest rates, which are expected to remain low, they can still be attractive loans. Because these loans are kept on their own books, the lenders incur all of the losses if there is a default, therefore, requiring a higher qualifying level in a market that is already requiring stiffer qualifying guidelines.

Bank of America, Wells Fargo and Citigroup are just some of the large banks that are not only willing but happy to provide jumbo loans. These luxury property buyers are required to have top notch credit scores of at least 720 and provide down payments between 25 percent to 40 percent, based on the amount being financed. Because of high credit scores and high cash down payments, the lenders feel relatively secure that these loans will not default.

Incredibly, luxury properties are recovering faster than other price points, and private market jumbo loan lenders are reporting that this market represents about 15 percent of the total dollar amount of mortgages they are processing. In all, lenders doled out $38 billion in private jumbo mortgages during the second quarter of 2012, which is up 65 percent from last year.

However, jumbo mortgages may not be the right choice for all luxury buyers even if they qualify. A lot of potential buyers are sitting on large amounts of cash and could decide to use it to get them into the range where they will qualify for a conventional lower rate mortgage at a more attractive rate. For some buyers, this is a good middle ground, saving them thousands in interest payments over the life of the mortgage while still giving them the advantage of a large tax deduction. At the present time, taxpayers can usually deduct interest payments on a total of up to $1 million of mortgage debt.

If you do decide on a jumbo mortgage, it’s important to shop around and get advice from a mortgage lender or broker who specializes in this area of home financing. Requirements can vary greatly from lender to lender as do down payment amounts, other outstanding debit levels and total assets.

Let’s hope the availability of jumbo mortgages attracts jumbo buyers and a jumbo housing recovery that will live for 24 years, just like Jumbo the Elephant.

Real Estate Transactions
Real Estate Transfers from June 1 to June 30, 2012
Sponsored by Alan Galletto Island Real Estate

Sold Date | List Price | Sold Price | Address | Provision | Property Style

Anna Maria

08/31/2012 379,900 348,500 211 Elm Ave # B 749 2 Br/1 Ba Condo
08/03/2012 599,000 548,000 807 Jacaranda Road 2832 62.0x100.0 2 Be/2 Ba SFR
08/10/2012 400,000 380,000 317 Magnolia Ave. 1064 52.0x120.0 3 Br/2 Ba SFR
08/15/2012 800,000 800,000 108 Beach Ave. 2722 150.0x106.04 Br/3.5 Ba SFR
08/15/2012 589,000 565,000 311 Tarpon St. 1022 75.0x110.0 2 Br/2 Ba SFR
08/27/2012 600,000 649,000 212 Palmetto Ave. 1819 52.0x110.0 3 Br/2.5 Ba SFR
08/17/2012 415,000 375,000 300 N Shore Drive 1680 78x100 2Br/2.5Ba Inc, bank owned
08/06/2012 317,000 300,000 812 Jacaranda Road 61.0x108.0 Vac.
08/29/2012 975,000 875,000 749 North Shore Drive 60x125 + Vac.

Bradenton Beach

08/10/2012 115,000 115,000 1603 Gulf N Drive # 25 380 1 Br/1 Ba Condo, bank owned 08/22/2012 125,000 125,000 1603 Gulf N Drive # 28 380 1 Br/1 Ba Condo
08/10/2012 215,000 240,000 2306 Avenue C 1674 50.0x100.0 2 Br/2 Ba Inc., bank owned
08/01/2012 169,900 150,000 2508 Avenue C 50.0x100.0 Vac.
08/01/2012 169,900 150,000 2510 Avenue C 50.0x100.0 Vac.Cortez
08/31/2012 285,000 260,000 9604 Cortez Road # 234 1800 3 Br/ Ba Condo
08/07/2012 295,000 282,000 12416 Baypointe Terr. 139x98 Vac.

Holmes Beach

08/06/2012 349,000 310,000 6400 Flotilla Drive # 46 985 2 Br/2 Ba Condo
08/13/2012 435,000 392,500 7000 Gulf Drive # 206 1259 2 Br/2 Ba Condo
08/13/2012 1,625,000 1,460,000 3302 Gulf Drive # 201 2108 3 Br/2.5 Ba Condo
08/17/2012 425,000 410,000 5200 Gulf Drive # 501 1169 2 Br/2 Ba Condo
08/17/2012 349,900 329,000 3803 E Bay Drive # 9a 1949 3 Br/3 Ba Condo
08/20/2012 279,000 265,000 741 Manatee Ave. # 31 1179 2 Br/2 Ba Condo
08/31/2012 399,900 355,000 100 73rd St. # 101a 660 1 Br/1 Ba Condo
08/01/2012 299,000 280,000 7002 Marina Drive 905 11456 Units 2 Br/1 Ba SFR
08/03/2012 700,000 695,000 513 83rd St. 2519 90.0x103.0 4 Br/3.5Ba SFR
08/13/2012 899,000 885,000 238 S Harbor Drive 1959 2 Br/2 Ba SFR
08/17/2012 269,900 269,900 2711 Gulf Drive 1350 50.0x100.0 2 Br/2 Ba SFR, bank owned
08/21/2012 1,499,000 1,365,000 8401 Marina Drive 3311 94.0x100.0 4 Br/3.5 Ba SFR
08/22/2012 489,000 460,000 504 58th St. 1540 78.0x108.0 3 Br/2 Ba SFR
08/22/2012 427,900 427,900 7001 Holmes Blvd. 1324 88x112 2Br/2Ba SFR
08/23/2012 399,000 386,000 306 72nd St. # A 2616 4 Br/4 Ba SFR, Short Sale
08/24/2012 317,000 290,000 7201 Palm Drive 1134 103x85 2 Br/2 Ba SFR
08/24/2012 498,750 400,000 517 75th St. 1806 90.0x121.0 3 Br/2 Ba SFR
08/24/2012 389,000 382,000 231 S Harbor Drive 1441 2Br/2 Ba SFR
08/29/2012 499,000 475,000 605 Baronet Lane 2000 100x117 4Br/3 Ba SFR, Short Sale
08/31/2012 399,900 315,000 402 73rd St. 1744 3 Br/2 Ba SFR
08/31/2012 389,000 369,000 3009 Avenue E # 2 751 100.0x105.0 2 Br/1 Ba Villa
08/10/2012 559,000 515,000 200 S Harbor Dr # All 2722 94.0x106.0 5 Br/4.5 Ba Inc.

Source: Manatee County Property Appraiser’s Office


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