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A Guide to Getting Bad Credit Home Improvement Loans
You might be wanting to look into bad credit home improvement loans but are unsure of where to start. After all, how do you get a good loan when your credit isn't the greatest? What you probably don't realize is that there are a number of lenders...

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Super Jumbo Loans: Interest Only

What is a super jumbo loan? No, it's not a loan for the obese, and it's not a loan for the elephants in the circus. A super jumbo loan refers to a type of loan for an amount of money that exceeds the normal mortgage product loan limits. Today, with the introduction of the interest only loans, and the price of real estate soaring through the roof, more and more of the market falls under the classification of a super jumbo loan. Let's look a little closer at the super jumbo loan, and who can use it, who does it benefit, and is it tied to the interest only loan option? The Super Jumbo mortgage product is for the mortgage loan that exceeds $650,000. If your mortgage exceeds that amount, then you must look to the super jumbo mortgage loan products to receive financing. Or, you can look to the interest only loan market, and there, some of the restrictions that apply to the traditional super jumbo mortgage loan, are lifted and do not apply. Let me explain a little more clearly. To receive a standard Super Jumbo mortgage loan, you were often subject to an interest rate pricing premium, in other words a higher rate, or a higher pricing premium on the loan, or you could try to use a combination of both first and second trust money, like a


first and second mortgage, and would still have to pay a little higher interest rate. Then BAM! Here comes the interest only loan, and now the borrower that needs a loans over 1,000,000 can get a smart choice loan, qualifying for only 1% interest in the first month. Okay, as a consumer, I don't think this is a wise way to go, for the average guy, anyway. But what about the real estate investor or developer, that turns over real estate like we do pancakes? These super jumbo loans with interest only loan options seem like a god send. They're an excellent way to obtain larger amounts in financing, and then turn around and sell the property, before it becomes an issue about the financing. This is the individual that should look to the super jumbo loan as an ally. Not the average consumer. However, with real estate prices rising faster than the water in the Titanic, many of today's prospective homeowners, especially in resort areas, are turning to these super jumbo loans in order to borrow enough to buy a home. I think these Super Jumbo loans with the interest only loan option are a mistake.

About the author:

John Williams writes about business loans from his business loans blog.