The jumbo property market in Texas is in much better shape than most markets around the country. However, sales are still slow in the upper end for a few reasons. But, one of the least discussed is the large down payment and reserve requirements for jumbo mortgages. The down payments required are generally 20%-25% of the purchase price. A large chuck of money on a 800,000 purchase. But, the limiting factor for a lot of would be buyers are the reserve requirement needed on top of the down payment. Reserves are defined as liquid cash left over after down payment and closing costs. Most lenders are requiring 12-24 months of Principal, Interest, taxes and insurance. Let’s assume a 800k purchase with 20% produces a Principal, Interest, Taxes and insurance payment of 5600. This means a 800k purchase requires at least 160k for the down payment and 67,200 in cash to meet the reserve requirement for a total of over 227k needed in cash.
Let’s compare that to the jumbo mortgage product offered by Moneysafe.com and DfwJumbo.com in the Dallas-Fort Worth metroplex. For qualified borrowers, only 10% down is required up to 875K. Only 6 months of reserves are required. This cuts the cash needed from the borrower in half, from over 227k to 116k. By any ones calculation, 116k is much easier to come up with then 227k. And the 30 yr fixed rates start as low as 5.25% with only 10% down. If you are in the market to buy a jumbo property or if you are marketing a jumbo property for sell please contact jhurst@moneysafe or call Jay Hurst at 214 824 2986 for how we can help.
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