Buying a Home with a Jumbo Mortgage

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Jumbo loans, also known as jumbo mortgages or non-conforming mortgages, are loans for higher than the amount typically approved by Fannie Mae and Freddie Mac (the Federal National Mortgage Association and the Federal Home Loan Mortgage Association).

Federal housing authorities recently raised the limits for conforming loans in many areas, including San Diego County. This means that currently in San Diego, any mortgage higher than $612,950 for a single-unit home purchase qualifies as a jumbo loan. Limits also increased for multi-unit purchases. (Check out the new conforming loan limits for all of California).

Jumbo loans can be a good option if you’re looking to buy a home in San Diego County. They can help you get the full amount you need without having to take out multiple loans or use all of your savings on a down payment. There are also a number of loan programs available, including 20 year fixed rates and adjustable rates; these choices give you some flexibility in the terms of your loan.

Of course, there are negatives to jumbo loans, too! Jumbo loans obviously come with higher risk for your bank, so the approval process can be more stringent, especially for first-time buyers. To qualify for a jumbo loan, you will need to show that your income is high enough to afford your payments. You also need an excellent credit score - typically 720 at the lowest. Lenders will look at your debt-to-income ratio and the appraised value of the property.

Jumbo loans traditionally come with higher interest rates than a traditional mortgage, but the difference in interest rates has been smaller in recent years. There is also no PMI associated with jumbo loans.

Have questions about whether a jumbo loan is the right move for your next home purchase? Helping my clients compare all of their financing options is part of the service I provide as an experienced San Diego buyer’s agent. You want to make the choice that works best for your immediate needs AND your long-term plans. And a jumbo loan may just be the right fit for you.

 

About Justin Gramm

Justin Gramm is the founder of Globella Buyers Realty and works full time as a San Diego exclusive buyer agent. Exclusive buyer agents never take listings or represent sellers. Exclusive buyer agents represent buyers-only 100% of the time, allowing you to hire a San Diego buyer's broker without the conflict of dual agency. Justin has helped many wonderful people from all over the world buy homes and condos in San Diego over the years. If you'd like to talk to Justin about your potential San Diego home purchase, you are welcome to schedule an interview. Feel free to call or email to get the process started. More About Justin Gramm

 

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