Jumbo Loans in California

Jumbo loans are becoming increasingly popular for California homebuyers. This is mostly due in part to the rising costs of homes in the state. The median price for a single-family home in the San Francisco Bay Area hit $1.7 million recently. As a result, increasingly more homebuyers in California are having to use jumbo loans to finance their property purchases.

What is a Jumbo Loan?

A jumbo loan is a loan that exceeds a particular county’s conforming high-balance loan limits. For most areas in California, the 2023 loan limits range from $726,200 to $1,089,200. In the Bay Area and other high-end coastal locales, the county limits are usually $1,089,200.

Jumbo loans tend to have more strict underwriting guidelines because they’re not sponsored by Fannie Mae or Freddie Mac. Instead, these loans are held by banks or private funds. The guidelines include tighter debt-to-income (DTI) ratio requirements, larger down payment and reserve requirements, and tighter credit standards.

Jumbo Loan Rates

Jumbo loan rates are usually lower than conventional loans. Part of the reason why jumbo loans have lower rates compared to conforming loans is because they have stricter qualification criteria due to the higher amount of funds being borrowed. At JVM, our jumbo rates match or beat all the big banks.

Who Should Use a Jumbo Loan

Jumbo loans are an excellent loan option for borrowers who have strong credit histories and have a decent amount of funds saved up for their home purchase. We strongly recommend that well-qualified borrowers with strong loan applications consider using a jumbo loan if the property they are looking to purchase exceeds the conforming loan limits.

If you are thinking about obtaining jumbo financing or have additional questions about what loan products you may qualify for, you can reach us here, by phone at (855) 855-4491, or by email at [email protected].

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