100% Financing on Jumbo Mortgages

Many high net worth borrowers are shocked at the lack of availability of low down payment options in the current mortgage lending landscape. Most lenders are requiring at least a 20% down payment on any jumbo loan with even higher down payment requirements for super jumbos. That means that many high net worth individuals are faced with the prospect of having to liquidate a large portion of their investment portfolio in order to purchase real estate.

We have a solution to this problem with our high net worth second mortgages. And unlike the traditional “pledged asset” mortgage, you will be able to keep your securities in your name in a brokerage account. We can do 80-20 loans at very attractive rates for borrowers who have the portfolio values to allow it – typically, you will need assets that are two times the amount of the second mortgage needed. Another possibility is to use this 2nd mortgage to keep your first mortgage at the $417k level in order to secure the best rates available today.

You can keep your investment portfolio working for you while obtaining the funds needed to close on your home purchase. On a refinance, if you have an issue with the appraised value, you can still get the refinance done and take advantage of the low rates available today by utilizing this 2nd mortgage product to pay down some of your first mortgage.

A quick example: Borrower is purchasing a $1M property and wants to bring no money down to the transaction. The borrower has $400k in various securities. We can provide a jumbo mortgage for $800k at a very attractive 30 year fixed rate of 5.50% (5.67% APR). The 2nd mortgage amount of $200k can be made based on the securities held and that rate would be a variable rate that is currently 5.35% (5.49% APR). This 2nd mortgage is an interest only loan and in most cases, the interest is tax deductible.

Refinance Example: Borrower had a current $500k loan balance and a rate of 6.5%. The property appraised for only $522k, meaning that the loan to value is 96% on the new refinance – which is not possible on a jumbo mortgage. The rate that the borrower was quoted on this new jumbo was 5.5%, however, his lender was unable to do the loan. We stepped in and took over at that point, and broke the loan down into a $417k first mortgage (80% loan to value) and a $83k second. The rate that we secured on the first was 4.5% (4.68% APR) – a full point lower than the jumbo rate the borrower was trying to get. The rate on the 2nd was 5.35% (5.49% APR). In the end, the borrower saved $358 per month over the jumbo refinance option and saved $775 over their old 6.5% loan.

Please contact us to get more details on this program.