Super Jumbo Mortgage Risks

super jumbo mortgage is a large mortgage loan that is used to purchase properties with selling prices of over $1 million. This type of loan is only available from certain lenders and can be difficult to find in certain markets. This type of loan carries significant risks to both the borrower and the lender. Here are some of the risks of super jumbo mortgage loans. 

Finding a Lender

With this type of loan, there are very few lenders that are willing to work with consumers. It is difficult to find lenders that are willing to part with millions of dollars for a piece of residential luxury property. Because of this, you will not be able to get very competitive interest rates. In most cases, you will have to work with a private investor to secure the funds.

Low Loan-to-Value Ratios

Another risk of this type of loan is that you will have to work with a smaller loan to value ratio than normal. This means that you will be forced to put up more cash in order to pay for the property. If you can no longer afford to make the payments on the house, you will lose a bigger amount of your own money than you would have if you had purchased a home with a traditional mortgage. This increases the amount of risk to you as an individual and takes more risk away from the lender.

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