Luxury Homebuying: What Does it Take to Own a $1 Million+ Home?
If your idea of a dream home leans toward a castle or an
opulent city condominium, you’re probably looking for a
home that will cost you $1 million or more. While that may
be a pie-in-the-sky idea for many people, moving up into
a luxury home isn’t necessarily as hard as it seems. Buying
a $1 million-plus residence definitely requires financial
resources, but you may be surprised to find that low interest
rates, additional inventory of lavish homes and a willingness
of lenders to approve large loans are all contributing to
resurgence in the luxury home market.
Lawrence Yun, chief economist for the National Association
of REALTORS®, told Bloomberg News that he anticipates that
sales of homes worth $1 million and more will increase over
10 percent in 2015 compared to last year’s sales. Similarly,
the Mortgage Bankers Association reported that in January
2015 applications for home loans for $1 million to $5 million
properties increased 16 percent compared to January
2014—another indication of momentum in the luxury
Living a life of luxury in a
$1 million-plus property
While the classic picture of a $1 million-plus property may be
an expansive single family home with manicured grounds
and maybe even a swimming pool, the reality is that many
$1 million homes are condos in cities such as Washington,
D.C. A luxury condo may not have the space of a sprawling
single family home, but what it lacks in square feet is easily
made up for by amenities that often rival a grand hotel. For
example, you might find spa services, resort-style swimming
pools, state-of-the-art fitness centers and hotel-like reception
areas, among other lavish amenities.
Financing a luxury home purchase
Whether you’re looking for an equestrian estate or a chic-and-sleek condo, you’ll need to finance your luxury home.
While some high-end buyers have the means to pay cash for
their purchase, if you need to take out a loan, the good news
is that lenders are more amenable to approving jumbo loans.
Source: 1. Bloomberg Business, Why Lenders Love the $2.5 Million Home Loan