Kathy A. Torline-Nordstrom
Cherry Creek Properties, LLC
Serving Colorado Springs
Jumbo loans are challenging
Search for Luxury homes in Colorado Springs
When the credit crisis hit a couple of years ago, most lenders stop making loan for more expensive homes; which has certainly made it challenging for homes to sell in the $500,000+ range. Per a recent article in the Wall Street Journal on Saturday, November 6th, it seems that some regional lenders are starting to issue more jumbo loans.
Jumbo loans are classified as loans too big to be issued by Fannie Mae and Freddie Mac; and the maximum amount for these loans in Colorado is $417,000. According to the WSJ article, Jumbo loans constituted 5% of total mortgages in 2009 and 2010 vs. 20% from 2004 to 2007.
More jumbo loans could certainly help the Colorado Springs luxury home market. There are currently 683 homes for sale in the Colorado Springs that are priced over $500,000; and 339 homes over $500,000 have sold in the last 10 months; equates to 34 homes a month. There is 20 months of inventory on the market; making it an BUYER’s market.
Since the consequences of jumbo loan foreclosure are so serious, getting approved for this type of loan is even more difficult. It is not uncommon for lenders who do participate in the jumbo loan market to utilize very strict guidelines for approving loans; and credit standards are are often more stringent for jumbo loans. In addition, many jumbo loans require a minimum down payment of twenty percent In additional jumbo home prices can be more subjective and not as easily sold to a mainstream borrower, therefore many lenders may require two appraisals on a jumbo mortgage loan.
If jumbo loans start to come back in the market, it certainly will help the luxury homes in Colorado Springs.
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To find out more information about buying a home in Colorado Springs or Manitou Springs, call ….
Kathy (719-287-1049) [email protected]