Jumbo Mortgage Loans in Ontario.
What is a Jumbo Loan?
In so many words, a jumbo loan simply refers to a mortgage of a large loan size, often unobtainable through traditional lenders. Property values for the most part continue to rise, especially in urban city centres, and even rural communities. In addition, interest rates remain at all-time lows regardless of the implications of the unprecedented COVID-19. On the other hand, those who might be struggling financially might be wishing to sell their property under market value in order to realize the equity in their properties. In turn, this creates opportunity for those who might want to purchase said properties under market value, and then sell for a profit, if all else is equal, of course.
Do Banks Provide Jumbo Loans?
We are often approached by clients who are unable to receive the required financing amount from their bank or institution. Furthermore, it isn’t always a result of insufficient income, or less than ideal credit. Most banks, credit unions, and trust companies restrict the amount of capital that they can provide to a borrower on anyone loan. Moreover, there is typically a sliding scale approach for loan amounts on higher value homes. For example, some traditional lenders will provide 80% loan to value on the first $1,000,000 of value, and provide 50% loan to value on the remaining value. Therefore, if you are wishing to purchase a property worth $2,500,000, you will receive $800,000 + $750,000 = $1,550,000. This is quite a difference between 80% on the entire purchase price, in fact, a difference of $450,000. Otherwise, it’s just a straight forward maximum loan amount limit which is often $2,000,000. You also want to keep in mind that if you are looking to purchase a home worth $1,000,000 or more by providing a down payment under 20%, this won’t work. Unfortunately, if you are purchasing with a down payment between 5% – 19.99%, the home you wish to purchase must be worth under $1,000,000 to become eligible for default insurance.
Reasons for a Jumbo Loan
- Purchase a luxury home
- Refinance a luxury home
- Home renovation loans for a luxury home
- Construction of a luxury home
- Condo inventory loans
- Land acquisition, including infill, townhome, and subdivision
- Bridge financing
- Business operating capital
- Spousal buyout or title transfer
- CRA issues including HST, personal, or corporate income tax arrears
- Funds to assist with litigation
There are countless reasons as to why one might be in need of obtaining a jumbo loan and it is our job to source you fast and flexible financing. In most cases, you might be approved based on sufficient equity, with the emphasis of the underwriting review placed on the integrity of the real estate asset. However, due to the sheer nature of jumbo loans, most lenders, and DV Capital Corporation want to ascertain your ability to service the jumbo loan. If there is a chance that the household or business income is in sufficient to service the jumbo loan, we would recommend building in an interest-reserve. This would either assist you with prepaying the mortgage for the term, or at least prepaying a portion of each monthly payment to tailor a custom mortgage payment for you.
DV Capital Corporation and Jumbo Mortgage Loans in Ontario
DV Capital Corporation can assist you with your jumbo loan mortgage requirements in Ontario and British Columbia. Whether you are seeking financing to purchase, refinance, or construct real estate, we will work relentlessly to help tailor you a solution. Our strategic partnerships with alternative and private mortgage funding sources allows us to provide cutting-edge solutions. Regardless of being turned down elsewhere, the capital requirement, your financing deadline, we welcome the opportunity to assess your needs.
Contact us anytime to learn more about Jumbo Mortgage Loans in Ontario.