High Balance and Jumbo Loans: A Quick Breakdown

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Jumbo Loans in California

With the averaged home price in California at $600,000, it’s easy to see how Jumbo Loans have been on the rise. California home prices are double the U.S. Median Home Price of $264,800. Full article here. With interest rates on the rise, we have already began to see a market shift this Fall as home prices have dropped slightly and the average days on the market taking a bit longer. What’s the difference between a High Balance Loan and a Jumbo Loan?

Quick Summary of High Balance and Jumbo Loans in California

High Balance Loans in a High Cost County like San Diego are between $417,000-$625,500 and follow Fannie Mae and Freddie Mac guidelines.

Jumbo Loans have a different set of standards and are not regulated by Fannie Mae and Freddie Mac. They are privately regulated and typically held onto as an investment. They can be more costly and require more documentation, review time and requirements than a Conventional Loan or Conventional High Balance Loan.

California Housing Market

The California Association of Realtors list average Home Sales by County in California here. The Bay Area tops the list with San Francisco averaging home sales at $1.6m this past October. Jumbo Loans and other Non-QM loans such as Bank Statement Loans and Asset Loans have continued to remain in demand. Bank Statement Loans average 12 or 24 months of deposits with an expense ratio variable by lender and have different matrices based on FICO Score, Loan to Value and other lender guidelines.

Thinking about purchasing in one of California’s High Cost markets and looking for a Jumbo Loan? Look for the following in Wholesale Brokers:

  • Compare rates

  • Loan programs

  • Average time to close

  • Service with wholesale brokers that shop your loan among industry giants to obtain highly competitive pricing, programs and service.

Pull Your Credit Score For Free Before You Apply For a Jumbo Loan here.

There are several places to pull your credit for free and review your credit report with a soft inquiry before completing a mortgage loan application. You can dispute any errors, obtain contact information to creditors and have a better picture of your overall credit standing before your credit is pulled on a “hard” lender inquiry. Jumbo lenders will still finance with lower scores, however may require a higher down payment and assets. Higher credit scores will often have better rates and less of a down payment.