Moreover, the new qualified mortgage regulations (QM) don’t apply to jumbos, which makes them a more flexible option for buyers who want things like interest-only loans or who have a high net worth but complicated finances.
Jumbo mortgages can make sense for financing a home purchase even when buyers have enough cash, says Denise Andres, a real estate agent with ERA Landmark in Bozeman, Mt., who recently helped a client who downsized with a jumbo loan rather than pay all cash. “His thought was, with the gains in the stock market, why would I want to pay all cash if I can get 30-year money so low?” she says.
Jumbos are luring more buyers into “move-up” purchases, and this, in turn, is freeing up inventory at the lower end of the market.
Source: Reuters (02/11/14) Pinkster, Beth
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