Jumbo Loans in California
For borrowers who qualify for mortgage loans outside the conforming loan limits of Fannie Mae and Freddie Mac, jumbo loans are an alternative that can provide the high figure funding needed for a luxury home purchase or refinancing transaction.
Home Loan Solutions offers jumbo loans in California to qualifying borrowers. They are a higher risk for our lending partners and the criteria for qualifying has become more stringent, so we carefully examine the profiles of each potential jumbo loan borrower.
Why are jumbo loans harder to get? Because after the bubble burst of 2008, lenders scaled back on furnishing them; now, they are being slowly re-introduced, but smart lenders utilize great caution to protect their investments. Jumbo loans are primarily issued for the purchase of a luxury residence, and if the borrower defaults, that residence will be harder to sell for full price – and virtually impossible to sell to a mainstream buyer.
Additionally, luxury home prices are more vulnerable to the fluctuations of the market. For that reason, jumbo loans in California require the borrower to make a higher down payment than they would on a loan inside the conforming limits. There are additional criteria as well.
To qualify for a jumbo mortgage in California, you must:
- Make a down payment of at least 20 percent for a purchase, or have at least 20 percent equity for a refinance
- Document the income that qualifies you to borrow a higher amount
- Ensure your monthly mortgage payment does not exceed 38 percent of your gross income
One prevalent myth is that introductory jumbo loan interest rates are significantly high. This is not always the case; in fact, with a higher down payment, your jumbo loan interest rate can be almost as low as the national average for a fixed rate mortgage.
If you believe you qualify for a jumbo loan mortgage, Home Loan Solutions will be glad to discuss this option with you. Jumbo loans in California are still a possibility for the right type of borrower; if you meet the above criteria, we welcome your inquiry.