Jumbo Home Loans in Southern California
This is a type of home loan financing that exceeds the limits set by the Federal Housing Finance Agency (FHFA) for conventional mortgages. These limits vary and are adjusted annually. These loans aren’t eligible to be purchased, guaranteed, or securitized by Fannie Mae or Freddie Mac. Jumbo loans are riskier for lenders, have higher interest rates and are tougher to qualify for. These loans are designed for luxury properties and highly competitive real estate markets. They are offered as fixed rate mortgages or adjustable-rate mortgages.
Jumbo Home Loan Requirements
• Credit score of 700 or better.
• Minimum of 20% down payment for primary residence. This can be more for second homes and investment properties.
• Debt to income ratio of 45% or less.
• 12 months or more of reserves. This can be a combination of cash, 401k, investments, or cash value of a life insurance policy.
• Verifiable and consistent income.
• Most lenders require a second appraisal to confirm the market property value.
Why a Jumbo Home Loan?
Jumbo home loans are intended for borrowers or buyers who don’t meet the Fannie Mae or Freddie Mac loan limit restrictions. These individuals have a choice of a jumbo loan or obtaining a second mortgage for the difference so that they meet the conforming loan limits set by Fannie Mae and Freddie Mac. This loan option is for borrowers who need to finance a loan balance greater than the conforming loan limits set. Jumbo loans offer some very unique loan features including various adjustable-rate terms, and interest only repayment options that may not be available on conforming loans.
Most borrowers will refinance the jumbo loan to reduce the interest rate and payment once the loan balance has been paid down below the Fannie Mae and Freddie Mac conforming loan limit.
Contact your Arbor Home Loan expert for a side by side comparison to see if the jumbo home loan is right for you
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Copyright © Arbor Home Loans 2024. All Rights Reserved.
NMLS 1206543 & DRE 02128292
Arbor Financial Group. NMLS Entity ID #236669. DRE #01845041
Licensed In: CA, FL