JPMorgan Chase has loosened its underwriting demands for large mortgages as it seeks to woo a bigger share of high-end homebuyers.
The nation’s largest bank lowered the minimum credit score and required down payment for multi-million dollar mortgages, the Wall Street Journal reports. The minimum down payment will drop to 15% from 20% on jumbo mortgages up to $3 million and will now require a minimum FICO score of 680 instead of 740.
JPMorgan (JPM) is trying to gain a larger portion of the luxury housing market as other big banks vie for those same customers. Bank of America (BAC) and Wells Fargo (WFC) have also made similar moves.
The move comes amid a bounce-back in high-end home buying, which has grown 58% over the last year to $93 billion. It’s the biggest the market’s been in eight years, the Journal reports. So-called jumbo mortgages include houses that start at $417,000 in most areas of the U.S. and $625,500 in pricier markets.
The advantage of these big-ticket loans is that such contracts have performed very well over recent years, according to JPMorgan. Only 1.9% of jumbo mortgages were 30 days or more overdue in June, whereas 6.5% of mortgages that align with Fannie Mae and Freddie Mac standards were overdue.