Advantages of Super Jumbo Loans
Jumbo loans are loans taken out for mortgages amounting more than $417,000. The exact amount varies by state, but it is easy to see why some homebuyers would find it necessary to take out a loan of that amount. What is harder to understand, however, is taking out super jumbo loans, which are generally loans that exceed the amount of $1,000,000. But there are plenty of reasons that a super jumbo loan can be a good idea.
Luxury investment property
Super jumbo loans can help you purchase luxury properties that can serve as an investment. Expensive beachfront property or a luxury four-unit condo complex in the mountains can be rented out at premium rates. If you are not a millionaire who can just plunk the money down, a super jumbo loan can help you get a lucrative property.
Variety of super jumbo loan programs
Depending on your credit score, there are super jumbo loan programs that will lend you the money without requiring a great deal of documentation in the form of income and asset statements. Additionally, just like regular mortgages, there are many financing options to choose from, including ARMs, interest only, and fixed rate super jumbo loans. Various term lengths are available to choose from as well.
Tax benefits of super jumbo loans
Even millionaires who do not have need of taking out super jumbo loans can benefit. Many of them take out super jumbo loans for the tax benefits. Like other mortgages, it is possible to write of the interest payments. And, if you are using the property financed through a super jumbo loan for business, there are other tax advantages as well.
On a cautious note
While there are definite advantages to super jumbo loans, and it can be great to speculate on what kind of investment you could make with that kind of money, it is important to keep in mind basic rules of financial common sense. You may not have to be a millionaire to get a super jumbo loan, but you do need to have enough money to make the mortgage payments. So, as before any other major financial decision, carefully evaluate your situation before deciding that a super jumbo loan is right for you.
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