How Do: People Buy Million Dollar Homes

Most people aren't buying $1M+ homes as their first property. They utilize selling an existing home that has appreciated over 5–10 years to generate a $300k–$500k down payment. This significantly reduces the loan-to-value (LTV) ratio, turning a million-dollar purchase into a manageable mortgage. 2. Borrowing Against Assets (Portfolio Lending)

For those who don't fit the traditional mold, alternative paths exist: How Do People Afford Million Dollar Homes? - HomeLight how do people buy million dollar homes

Buyers use their investment portfolios as collateral to secure interest-only loans . Most people aren't buying $1M+ homes as their first property

By keeping $2M in stocks growing at 8% while paying 5–6% interest on a loan, they essentially "make money" while buying property. 3. Jumbo Mortgages and Private Banking By keeping $2M in stocks growing at 8%

When a loan exceeds the federal limit (usually around $800k–$1M depending on the area), buyers must secure a .

High-net-worth individuals often don't want to liquidate their investments (like stocks or bonds) because they don't want to pay capital gains taxes or lose out on market growth.