Jumbo Loans in California
What is a Jumbo Loan?
A jumbo loan is a mortgage that is larger than the conforming loan limits set by Fannie Mae and Freddie Mac. In California, these limits vary by county, but in many areas, loans over $1,089,300 are considered jumbo. Because they exceed conforming limits, jumbo loans are not backed by government-sponsored entities and often require stronger credit, higher income, and larger down payments.
Common Questions and Answers
Why do jumbo loans have higher interest rates?
Jumbo loans can carry higher rates because they represent a larger risk to lenders. Since they can’t be sold to Fannie Mae or Freddie Mac, lenders hold them in their own portfolios and set stricter lending terms.
Are jumbo loans more expensive?
They can be. Higher loan amounts mean higher total interest paid over time. Rates can also be slightly higher, but with excellent credit and a strong financial profile, competitive rates are possible.
Are jumbo loans assumable?
Most jumbo loans are not assumable, but this can vary by lender. If assuming is important, check with your lender before closing.
Are jumbo loans conforming?
No. By definition, jumbo loans exceed conforming loan limits.
Are jumbo loans bad?
Not at all. For qualified buyers, they are a powerful tool to purchase high-value properties. They just require stronger qualifications.
What are jumbo loan requirements?
Most lenders require a credit score of 700 or higher, a low debt-to-income ratio, and proof of strong income and assets. Down payments typically range from 10% to 20% or more.
Can jumbo loans be recast?
Some lenders allow recasting, which means applying a large principal payment to reduce monthly payments without refinancing. Check your loan terms.
Can jumbo loans be used for investment properties?
Yes, but requirements can be even stricter, with higher down payments and stronger cash reserves.
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Contact
Armando Novelo
NMLS 237243
Super Mortgage Bros
1900 W. Garvey Ave S. #100
West Covina, CA 91790
Phone: (626) 200-1838
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