Trying to buy an expensive house with a relatively low down payment? Call the local branch of a major bank and ask to speak with the private banking department. In some cases, consumers have been able to buy homes with only 10% down. Mortgage loans in excess of about $275,000 are considered “jumbo” or “non-conforming” loans. They’re bigger than the standard set by Fannie Mae [the Federal National Mortgage Association] so they don’t have the same underpinning. Therefore, banks have stricter guidelines for making such loans; you’ll probably have to demonstrate a sizable income and substantial assets.
The good news is that many banks are eager to work with home buyers who have solid financial prospects. Often, lenders will help you put together the loan application, rounding up the necessary documents. Just be sure that you’re not over-reaching when you seek such a large mortgage. Assuming a mortgage rate of 7.5%, the interest on a $400,000 mortgage would be $30,000 per year, in addition to other expenses ranging from property taxes to homeowner’s insurance. You might be better off buying a less expensive home and reducing your monthly obligations.
