Home values still on the rise in many markets in California from San Francisco to San Diego. Since the median home price average is close to $900,000, jumbo loans are typically the financing vehicle of choice.
Leveraging a home with a jumbo mortgage means putting as little down as possible to obtain the loan, all the while preserving cash to be used for other investments.
Qualified buyers can now finance a luxury home to up 95% financing, preserving your capital for other purposes.
Questions about any of the purchase or refinance programs? Please connect with a Jumbo loan specialist 7 days a week:
📞 800-840-6449
Jumbo loans are basically any mortgage amount over the base conforming loan limit. For most of California, the conforming loan limit is $832,750, but high-cost counties in San Francisco, Orange, Los Angeles, etc can be as high as $1,249,125 for a single 1-unit property.
For many years, jumbo loans were only available to buyers who could put down 20% or more to qualify for a jumbo. Yet credit guidelines have solidified and the real estate and mortgage markets have rebounded nicely. As a result, there are jumbo loans in California that require a down payment of only 5%, not 20% or 25%.
Interest rates for a 5 percent jumbo loan are very competitive, however, they will be slightly higher compared to a loan with a 10%+ down payment. This is often the case for any mortgage as the down payment amount is the main factor in determining overall loan risk to the lender or bank.
For example, let’s say there is a home listed for sale at $1.5 million. Traditionally, a 20% down payment meant coming to the closing table with a down payment amount of $300,000 plus closing costs and cash reserves. With a 5% amount, that results in a down payment of just $75,000.
Jumbo loans with less than 20% down can be structured in a few ways. The most popular option is a combo first and second mortgage – often referred to as a “piggyback” loan. Or one simple single loan, both these options do not require mortgage insurance.
There are pros and cons with each option depending on the buyer’s loan amount, down payment, credit profile, etc. Please read more about all the Jumbo loan requirements here.
Eligible military Veterans in California should also learn about the VA Jumbo options available. Read more info under the Jumbo Purchase page. The VA Jumbo mortgage offers eligible vets the lowest down payment option available today.
Mortgage rates recently have hit their lowest level in the past year. Current homeowners can learn more about Jumbo refinance opportunities here. Please contact us 7 days a week for a quick rate quote or to connect with a specialist.
Please call 📞800-840-6449, or just submit the Quick Call Form on this page.
