Apart from its reputation as the entertainment capital of the world, the city of Las Vegas is also known to have a high concentration of the most grandiose luxury homes amid a desert setting. Investing in these high-end properties naturally requires considerable financial resources. Many luxury home seekers manage to buy these properties by paying cash on the spot.
THE LOWDOWN ON SPOT CASH PAYMENTS
While it eliminates the need to pay monthly mortgage fees, paying for a luxury home in cash essentially weakens your financial flexibility. Moreover, you might miss out on some tax benefits that you could otherwise take advantage of when financing your home purchase via a mortgage.
LUXURY HOME FINANCING
Not everyone who buys a luxury home is dripping with money. Some are smart investors who know a good opportunity when they see one. Others may have the finances but are committed to other financial obligations. It is because of this set that luxury home financing was created.
Luxury home financing and your standard home loan both serve to extend a home buyer’s purchasing power – but the similarity ends there. A regular mortgage could provide financing of up to a few hundred thousand dollars. Meanwhile, loans for million-dollar homes go way beyond those limits.
In Sin City, luxury home buyers who are not too keen on paying in cash could opt for the following means of financing:
Jumbo mortgage
This is the most common mortgage type that luxury home buyers opt for, especially since many lenders have the capacity to provide for the level of financing required by this loan. In most areas, the minimum going rate by Freddie Mac and Fannie Mae is at $726,200 while in high-cost areas like Las Vegas, it could go past the $1 million mark.
Given the larger amount lenders have to part with, the requirements for such a loan are more stringent than your regular home mortgage. The down payment is usually higher (around 10% to 20%), your credit score must be remarkably high (from 680 to 740), and you can also expect monthly mortgage fees to be higher than those of standard loans.
Super jumbo mortgage
As its name suggests, a super jumbo loan caters to more expensive properties. Lenders could part with at least $3 million to finance a luxury home purchase. But just as they could lend a bigger amount, lenders of this kind of loan also have even more stringent measures for qualification and payment in place. Moreover, lenders with the capacity to offer super jumbo loans are quite rare.
Bank statement loans
Self-employed luxury home buyers benefit from this type of loan as they only need to provide lenders with their bank statements from the past 12 months. A certain percentage from their monthly deposits will be set as the monthly income and this will be the basis for lenders to accept their loan application.
Non-QM (qualified mortgage)
Subprime mortgage lenders are those who cater to people who couldn’t qualify for conventional or government loans due to factors like a low credit score, previous bankruptcies, and the like. A non-QM from this special set of lenders may be able to provide you with the amount you need to buy that dream Las Vegas luxury home.
There’s no better Realtor for Las Vegas luxury homes than Anthony Romeo when it comes to showing the finer ways of connecting you with your dream home in Sin City. Learn more from Anthony by calling 702.353.6759 or sending a message here.