The uncertainty and fear of the crash in sub prime mortgages are now affecting the jumbo loan market which are loans greater than $417,000. Numerous lenders are refusing these loans altogether and according to bankrate.com numerous lenders are charging exorbitantly high interest rates on such programs and really just pricing themselves out of the market.
In addition, numerous banks are not offering “stated income” loans anymore either even with perfect credit. These are loans where the bank just verifies the borrower’s assets and does not verify their income so borrowers can state any income they want. According to a WSJ article today, small business owners are also finding it tougher to obtain financing due to the woes in the sub prime market.
Since many luxury home buyers typically obtain these two types of loans in the Orlando market, the homes in the luxury market will begin suffer even more in the coming months.