Millenials with mortgages: Why the jumbo loan is so hot right now

By Lucy Cohen Blatter | May 5, 2015 - 3:06PM

Thanks to low interest rates and loosening credit qualifications more millenials (those ages 35 and younger) are qualifying for mortgages,even of the jumbo variety, the Wall Street Journal reports.

In NYC, any loan over $625,000 is called a jumbo loan (the minimum in less expensive markets is $417,000). Typically, jumbo loans, also known as "nonconforming loans," are issued to borrowers with the best credit.

But lenders have been making it easier for borrowers — millenials included — to qualify for jumbo loans, allowing them to compensate for income and credit shortfalls in other ways (for instance, with reserves and capital gains from stock).

Also, while jumbo loans used to come with higher interest rates, now the rates attached to them are sometimes actually lower.

And, according to the Journal, some lenders are only requiring downpayments of just 10 to 15 percent for jumbo loans -- even in NYC (assuming the borrower is extremely qualified). While that's still a large chunk of change on a mortgage over $625,000, many millenials turn to their baby boomer parents for help on down payments.

Even for those who can't turn to mom and dad for help or can't qualify for a jumbo loan, there are options, including government-backed programs that allow for just 3 percent down payments.

The millenial's guide to getting a mortgage

Jumbo loans demystified: What NYC buyers need to know

4 ways to screw up your mortgage application--and how to avoid them (sponsored)

The 3 percent down mortgage you've never heard of that's available in NYC

Brick Underground articles occasionally include the expertise of, or information about, advertising partners when relevant to the story. We will never promote an advertiser's product without making the relationship clear to our readers.