With some home loans, it’s a matter of degree

03/27/2014

With some home loans, it’s a matter of degree

With some home loans, it’s a matter of degree

NEW YORK – March 18, 2014 – With the jumbo loan market picking up steam, lenders are increasing the number of specialty-profession mortgages with low- or zero-down payment options and no mortgage insurance requirements. These products aim to make it easier for lawyers, doctors and borrowers in other high-paid careers to qualify for home financing.

Michael Zimov, physician-specialist officer at Fifth Third Bank, says that specialty-profession mortgages generally “perform very well and have low default rates.”

Lenders are drawn to these loans again due to rising interest rates, new mortgage rules and a drop in refinancing activity; and Inside Mortgage Finance reports a 20.9 percent surge in private jumbo loan originations, which reached a seven-year high of $272 billion last year.

Citi Private Bank’s law-firm group, for instance, originated 4,000 mortgages averaging $800,000 apiece to attorneys last year and is expanding its operations into Houston, Dallas, Austin, Denver, Seattle, Philadelphia and Arizona.

Meanwhile, Bank of America’s physician-loan program issued jumbo loans last year averaging $535,000. “It’s key to our business strategy,” says BofA’s Matt Vernon. “We’re broader than the mortgage transaction; we’re looking for long-term customers.”

Source: Wall Street Journal (03/14/14) P. M4; Davis, Lisa Selin

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