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A jumbo mortgage refers to a high-priced loan, usually meant for a luxury property. And while this loan may have once been reserved for the millionaire investors of the world, it may not be as exclusive as you think. If you're interested in what it takes to apply, it helps to understand how they work and who the best candidates are.
A Moving Target
To be considered for a jumbo loan, it must be above a certain minimum. However, this amount will differ based on where you purchase your home. The minimum for a jumbo loan in Beverly Hills will be much higher than the minimum in Kansas City due to the discrepancies between median home prices. These values will rise and fall depending on the local economy and average property appraisals, so buyers will need to do a little research into their city's criteria.
Jumbo mortgages are available in a variety of options, similar to a conventional loan. Unsurprisingly, lenders tend to be a little pickier when it comes to who they approve and who they reject. A single application may go through several underwriters to arrive at the final answer. They're looking for exceptionally high credit scores and equally low debt-to-income ratios.
It's the lender who dictates the exact terms of the loan, though historically, jumbo loans have had higher interest rates. However, it should be noted that this is not a hard-and-fast rule. Interest rates have been known to come down based on the caliber of people who apply. The more qualified applicants, the less overall risk the lender assumes.
In addition, the jumbo mortgage minimum down payment has been relaxed to just 5% to allow a more level playing field (especially for people in high-priced markets). Despite this though, most lenders are still looking for at least 15% on a jumbo loan. Shopping around can make it easier to find a lender with reasonable terms for a jumbo loan.
Structuring the Loan
Adjustable-rate jumbo loans are available, but they are not the ideal choice for homeowners unless they know they'll be selling in the very near future. To avoid paying more interest than necessary, experts recommend a fixed-rate over 15 years.
There may be a lot of fine print to a jumbo loan, but lenders are largely ensuring that the homeowner has enough in stable assets (e.g., property, savings, etc.) to cover their mortgage even if they fall on hard times. Knowing the terms can make it easier to prepare, apply, and be approved for the home of your dreams.
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As home buyers become younger and younger, energy-efficient structures become more popular. According to the National Association of Home Builders, the most sought-after green features in a home include:
- Energy-Star rated windows and appliances.
- Toilets that conserve water.
- Tankless water heaters.
- Solar panels.
- Extra insulation.
- Triple-paned glass in windows and doors.
Home buyers in 2020 want an efficient home that boasts big creature comforts, combined with a small monthly utility bill.
Hand-in-hand with energy efficiency comes sustainability. Recycled building materials such as reclaimed wood and recycled steel are gaining ground as viable alternatives to traditional building materials. The use of pre-cast concrete and bamboo is increasing as well. But homebuyers who really want to flaunt their devotion to sustainable products this year may be able to choose sheep's wool or straw bales as home insulation. Houses made of earth may even begin to crop up in places where they weren't previously welcome.
It's a digital world in which we live in 2020. That's why young home buyers want more tech features in the homes they're considering living in for the next three-to-five years. CNET includes the following devices in their list of top home tech:
- Smart speakers.
- Smart displays.
- Mesh routers.
- Smart plugs.
- Smart light bulbs.
- Smart thermostats.
- Video doorbells.
- Home security systems.
These devices not only protect your home from intruders and show you who's at your door from across the country, they do the little things, too. They can read you a recipe so you're free to keep your hands in the bowl. They can ensure you have seamless WIFI connection all through the house and have your rooms warmed up and waiting for you when you get home from work in the evenings. Today's tech is all about hands-free convenience at the simple command of a voice, and today's home buyers are crazy for it.
Open-concept areas are still big this year, but in 2020, they're expanding to include the great outdoors. Homes that offer a seamless transition from indoors to an upgraded, outdoor living space are in demand. Walls of sliding, glass doors that simply fold away to remove the barrier between a kitchen and an outdoor deck are prime real estate.
Other top trends in home design this year include industrial living spaces and rooms that boast high-contrast decor. The majority of home buyers going forward are expected to be some of the youngest, most professional that the market has ever seen. Younger buyers means more adventurous floor plans and garages capable of housing multiple cars. In short, 2020 is shaping up to be a real estate agent's dream.
Having a beautiful home is wonderful, but having a beautiful home with an elegant and functional kitchen is fantastic. Updated kitchen décor and finishes are an on-trend way to create a warm gathering place for friends and family. A real wood countertop is a top option for perfecting the natural kitchen décor motif.
Wooden Countertop Styles
There are distinctive styles of wooden countertop materials available, and each serves a different purpose and esthetic.
Butcher Block Countertops: For countertop that allows you to slice and cut directly on the surface, the butcher block is your best choice. The wood is two to three inches thick of alternating species and can withstand damage from chopping and dicing with proper care. Available in various wood mixtures as end-grain and edge-grain, its hardness and color options make it easier to choose the one that fits into your kitchen theme.
Reclaimed Wood Countertops: For people who appreciate the rustic look, a repurposed wood countertop is a great option. Currently among the trending countertops, reclaimed wood is relatively simple to find and source locally. Most reclaimed wood countertops come from recycled or discarded wood.
Live Edge Wood Countertops: Made from planed but not trimmed raw wood, a live edge countertop retains the original shape of the tree. The unique thing about this countertop is its rustic and uncommon look; it curves inward in some areas and rounds out in others, giving your kitchen or bar area a beautiful and unique look.
Solid Wood Countertops: The solid wood countertop option works well with all kitchen designs, creating a timeless and traditional look for your kitchen. Thick planks of mahogany, walnut, knotty alder, or other hardwoods waterproofed with acrylic polyurethane come in flat, dull, satin, and semi-gloss finishes for an elegant addition to your countertops.
Your Choice of Wood
Ensure that the design, grain, and finish of the wooden countertop you choose is appropriate for its purpose. Hardwood like maple, teak, oak, chestnut, and mahogany make great countertop material, especially if you intend to chop and slice directly on the counter surface. For a more sustainable option, bamboo, while not technically wood, is an attractive and durable choice.
Your kitchen countertop has a significant impact on the look and feel of your room. For best results, consult with or hire a professional contractor who is knowledgeable about the installation process for these unique surfaces.