An Overview: What you Need to Know about Jumbo Loans


Filed under: Jumbo Loans


People often hear the term “jumbo loan” and don’t understand what it means in the mortgage industry. Today we are going to look at this type of financing so that you can see how it might be beneficial for your situation. Jumbo Loans

What is a Jumbo Loan?

A jumbo loan is beyond what Fannie Mae and Freddie Mac will lend. That amount is different depending on the county in the United States where you live. Your mortgage lender can help you understand the high balance limit to determine the size of the loan that is available for your family. In Riverside County, the limit is set at the conforming limit. But, other counties, such as San Diego, Orange County, LA, and parts of Western Washington are significantly higher, so they have conventional and conventional high balance.

When the loan is below the limits of Fannie Mae and Freddie Mac, then essentially all of the loans are the same. But, if you need a loan that is bigger than the restrictions established in your local area, then you might talk to a lender about a jumbo loan. It can start to get a little tricky because each lender will have their own guidelines.

There are pros and cons to the guidelines that are established by each lender. As you are applying for a jumbo loan, you might experience the situation where one lender will deny the loan while another one will accept it. So, you can shop around to find a financing solution that will work for you.

The Great Divide in Southern California

Recently, we have seen that houses under $450,000 are selling like hot cakes. But, homes that are more expensive tend to stay on the market a little longer. These trends are driven by financing. There are many options to help homeowners get into a property at a lower price point, but there is a larger barrier to entry to get financing for a higher-priced home.

Jumbo Loan Highlights

Don’t be fooled into thinking that jumbo loans aren’t available. As you learn more about the financing options, you will see that there are different solutions that can be used.

First of all, we need to break the myth that buyers looking for a primary residence need 20% or more for their down payment. The truth is that a large percentage of loans have less than 20% down.

Here are a few highlights to help you understand jumbo loans:

  • Many jumbo loan interest rates are right in line with conventional lending
  • There are options available for down payments on jumbo lending, including 5% and 10% down
  • Like a conventional loan, a lower down payment might require mortgage insurance
  • A solid credit score will help you qualify for a jumbo loan

Do you need help finding the right jumbo loan for your home purchase? Talk to our team to learn more about the financing options that are available!


Franklin Loan Center | NMLS 237653
Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, 4131316
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