If you are shopping for a home in the San Francisco Bay Area, you know housing here is in high demand. That means there are many situations where you might need to apply for jumbo financing to purchase the home of your dreams.
A jumbo loan allows you to obtain financing which surpasses the limits set by Fannie Mae and Freddie Mac for conventional lending.
The San Francisco Bay Area features high home values, which is why Fannie Mae and Freddie Mac have set higher conforming loan limits for many counties in the region than they have for others throughout the country.
For example, the conventional loan limits for Contra Costa County, where we are based, are as follows:
The same limits apply in San Francisco County.
Other counties with these same conforming loan limits include Marin, San Mateo, Santa Cruz, Santa Clara, San Benito, Monterey, and Napa.
In some of the surrounding counties, the limits are reduced. This is because those counties tend to have lower home values.
How likely is it that you will end up needing a jumbo loan?
Consider that as of the time of this writing, the average home value in Walnut Creek is around $874,200 according to Zillow.
That exceeds the $726,525 conforming loan limit for a single unit. So there is a pretty good chance that a jumbo loan will be appropriate for you if you are shopping for home anywhere in the Bay Area.
In general, the process of applying for jumbo financing is not much different from the application process for a conventional loan in the Bay Area.
You will want as low a risk profile as possible as a borrower. That means a high credit score and low debt-to-income ratio.
At least six months of cash reserves are typically required. Some lenders may ask for a whole year of reserves. You must be able to document the existence of these reserves.
It is possible to find a jumbo loan with a down payment which is in line with what you would have to put down with a conventional loan. Down payments can run higher for jumbo loans, however—up to 30%.
It is common to need to appraise the property you want to purchase twice to qualify for a jumbo loan.
Although qualification requirements for jumbo financing are more strict than those for conventional financing, it does not need to be difficult to qualify for a competitive loan.
In fact, it is a mistake to assume that you will be paying higher interest rates with a jumbo loan by default. With solid bargaining power and the right mortgage broker on your side, you could get low rates which are just as affordable as conventional loan rates.
If you are ready to apply now for a competitive jumbo loan in Walnut Creek or elsewhere in the Bay Area, please call (925) 478-8630 to schedule your consultation. While we are based in Walnut Creek CA, we serve customers in the San Francisco Bay Area. This includes Martinez, Concord, Pleasant Hill, Alamo, Danville, San Ramon, Orinda, Moraga, Lafayette and throughout California.
Bridgepoint Funding is an Equal Housing Lender. As prohibited by federal law, we do not engage in business practices that discriminate on the basis of race, color, religion, national origin, sex, marital status, age, because all or part of your income may be derived from any public assistance program, or because you have, in good faith, exercised any right under the Consumer Credit Protection Act. Disclaimer: Programs subject to change without notice. All borrowers must qualify per program guidelines.
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