The real estate market in Columbus, Ohio and surrounding areas provide a wealth of options. The median home value in Columbus is around $216,000 and the median household income is approximately $58,000 per year. Yet despite the relatively low median home value, the luxury market in Columbus and surrounding areas are vibrant and growing.
Overall, the housing market in Columbus and surrounding areas remain more than just healthy, it’s growing and according to the National Association of Realtors, Columbus is either the 10th or 11th “hottest” real estate market in the country. The term “hottest” actually refers to the number of days on market from the day of the initial listing to an accepted offer. Recent data indicate the days on the market number in Columbus is around 23 days.
Among the higher-end communities in and around Columbus are Bexley, New Albany, and German Village. These luxury communities, as well as similar neighborhoods, have seen double-digit increases in value. For example, the average sales price for homes sold in Grandview Heights rose by 55 percent compared to the same period last year. Most often when buyers begin their search for financing they usually start with their own bank or credit union. However, many lenders offer the same basic set of vanilla mortgage programs found at most banks.
These programs will ask for at least 20 percent down and even 25 or 30 percent depending on the sales price and other factors. This doesn’t’ necessarily prohibit those buying a higher end home due to the availability of funds but rather potential buyers would rather keep their funds in a savings or retirement account instead of liquidating funds to come up with a 20 percent + down payment requirement.
Yet there are other more competitive options that allow high-cost borrowers to hold onto most of their funds instead of coming up with the cash required for not just the down payment but required closing costs as well.
One such program is the 95% Jumbo loan, a popular option that permits approved home buyers to purchase for a down payment of just 5% of the sales price. There are two basic options for a 5 percent jumbo mortgage. One structured with two mortgages and one with a single loan. The single loan option asks for just a 5% down payment on just one mortgage and no subordinate financing. For example, let’s take a sales price of $750,000 million. A down payment of 5.0% comes to $37,500 resulting in a first mortgage loan at $712,500.
The credit requirements for this program ask for a minimum FICO score of 700 and the program can only be used to finance a primary residence. Second homes, vacation or investment properties are also allowed on this program but permit a higher down payment. See all the jumbo loan program details here.
The second option should also be considered, the 80-15-5 program. With this option, the first mortgage is at 80 percent of the value of the home, eliminating the requirement for mortgage insurance. There is also a subsequent second lien representing 15 percent of the sales price. Let’s look at a $1 million dollar sales price and apply the 80-15-5 parameters. The first mortgage would be $800,000 with a subordinate second lien of 15 percent of the sales price resulting in a second loan amount of $150,000.
In both options, the total monthly payments should be compared to determine which is the most competitive option. The 5% down, single loan program will have slightly higher rates when compared to a combo 80-15-5 structure. However, the overall closing costs will be less with a single 95% option since there is only one single loan. It’s important to note all the 95% LTV Jumbo options have a $1.0 million loan amount limit. However, eligible borrowers with 10% down can finance even greater amounts.
Questions about the Jumbo purchase and refinance options available today? Please call us at the number above or submit the Quick Call Form on this page to have a loan specialist contact you. We serve all of the U.S. including Ohio – Columbus, Cleveland, Cincinnati