30-Year Jumbo Purchase

Jumbo refers to loan amounts that are above a certain limit. This limit is determined by the county your property is located in. This limit increases periodically:

Example 1: The 2024 Jumbo limit for Orange County California is $1,149,825 if you have a one-family home. The limit is $1,472,250 for a two-family home, $1,779,525 for a three-family home, and $2,211,600 for a four-family home.

You can see in the example above that the limit increases based on the family size of the property.

Example 2: The 2024 Jumbo limit for Riverside County California is $766,550 if you have a one-family home. The limit is $981,500 for a two-family home, $1,186,350 for a three-family home, and $1,474,400 for a four-family home.

Click here to check the limit in your county: Fannie Mae and Freddie Mac Loan Limits

So, what does all this Jumbo loan size babble mean for the homebuyer or homeowner??It means that the homebuyer or homeowner is going to receive different interest rate pricing for their Jumbo loan amount. The interest rate pricing is going to vary depending on if the homebuyer or homeowner is talking to a bank, a brokerage, or a lender…

“Big Box” mortgage lenders traditionally do not deal much with Jumbo loans. The Jumbo loan interest rate pricing at big lenders is always much higher than their regular rates, and also much higher than the big banks. I previously worked at two of the largest lenders in the country and was able to see it firsthand. Not only were our Jumbo loan prices much higher, but we often had no Jumbo loan products available when a potential customer contacted us about a jumbo loan. The big lenders make a killing in the Conforming and Government mortgage markets, so they don’t care much about the Jumbo market.

Large banks are typically the places to go for Jumbo loans if the homebuyer or homeowner is well qualified. “Well Qualified” refers to credit scores in the 760 range and above, stable/verifiable income, significant liquid assets, and low debt-to-income ratios. It also means that homebuyers are putting a minimum of 20%-25% down and homeowners who are refinancing have a minimum of 20%-30% equity in their homes. Well qualified homebuyers and homeowners will typically get superior interest rate pricing at the big banks, but it’s not all “peaches and cream”. The big banks can be notoriously selective when it comes to underwriting Jumbo loans. I’ve also worked for two of the largest banks in the country and experienced their selectiveness firsthand. Big banks only want the best customers in their portfolios and can turn down or delay a loan for the slightest reason. Their Jumbo refinance loans can also take a very long time to close. However, there is an alternative for Jumbo homebuyers and homeowners who need to close their loans fast and/or do not feel like dealing with the bank bureaucracy – Brokerages are that alternative.