Big Leverage is Back!

Big LeverageRemember when it was possible to finance a $2mm home with only 10% down payment? Of course, that was 2007 and mortgage lending guidelines were so loose that they eventually led to the Great Recession. That written, it is possible today to purchase a $1,760,000 home with only 15% down, and the seller is NOT required to participate in the financing! Let’s break it down for better illustration:

  • Purchase price of $1,760,000
  • First mortgage of $1,232,000 (70% loan-to-value)
  • Second mortgage of $264,000 (15% loan-to-value)
  • Down payment of $264,000 (15% loan-to-value)

Add up the total amount of leverage/mortgages available in this scenario, and that’s $1,496,000 in total leverage!

You may be asking how this is possible when the Great Recession was blamed on lending guidelines being too loose. The answer is that the risk of high leverage can be offset by sticking with sound fundamentals of mortgage lending, which include good credit, stable employment, reasonable debt-to-income rations, solid reserves and a stable real estate market.

For a one-page illustration of the program above, please visit http://online.wsj.com/article/SB10001424127887323798104578454853809083688.html#mod=todays_us_marketplace

For more details on high-leverage programs, along with details on any of the vast mortgage-lending programs that we offer, please contact your preferred mortgage advisor.

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2 thoughts on “Big Leverage is Back!

  1. Howdy just wanted to give you a quick heads up.
    The words in your article seem to be running off the screen in Ie.
    I’m not sure if this is a format issue or something to do with internet browser compatibility but I thought I’d
    post to let you know. The design and style look great though!
    Hope you get the issue resolved soon. Cheers

    • Thank you for letting us know! It seems to be working well on this end. I’ve checked it on IE8, Chrome, and Safari. Perhaps it’s the version of IE that you are using that is causing the formatting issues. I’ll take a closer look!

      Thanks again–really appreciate it!!

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