Jumbo Loan Limits and Lower Down Payments

  • Jumbo Loans Programs in California.001

One question we occasionally encounter from prospective jumbo loan borrowers is, “Are there limits on the down payment amount a borrower can make on a jumbo loan?” The answer is no, a buyer can make as large a down payment as he wants on a jumbo loan – provided that he meets the lender’s minimum down payment requirement, of course.

There are actually many reasons to make a larger down payment on a home, especially when a jumbo loan is the financial instrument you use to make the purchase. One reason to make the down payment larger is to pay off the mortgage faster, and not just because you want to get rid of your house payment.

As many homeowners have found out since the bubble burst of 2007 and 2008, it’s easy to get “upside down” on a mortgage (otherwise known as “negative equity”) when the market takes a turn and home values fall. If that happens to a jumbo loan borrower (who has at least $417,000 invested in the home, because that is where conforming loan limits end and jumbo loan limits start), then having a larger portion of the mortgage paid off can reduce his risk of getting himself into that negative equity situation.

Bottom line, it just makes good financial sense to make as large a down payment as possible – especially since there are no jumbo loan limits on the down payment. So for example, if you are purchasing a $600,000 house and you want to make a 20 percent down payment of $120,000, that is a strategy that may help you pay down your mortgage faster.

Speaking of Down Payments…

There is news on the down payment front, though, and it’s good news for borrowers who don’t have the ability to make a hefty down payment like the one we just described. The news is that some lenders are now doing jumbo loans with down payments as low as 10 percent, for buyers who meet all other jumbo loan qualifications. At Wholesale Capital Corporation, this is something that may be available; ask your loan officer for details.

…Back to Jumbo Loan Limits

So, what are the current conforming loan limits? As stated, jumbo loans in Riverside and San Bernardino Counties still start at $417,000. For homes in Los Angeles County and Orange County, the magic number is $625,500; in San Diego County, it’s $546,250. For our Arizona borrowers, please note that each county has its own loan limit in that state as well; if you are buying a home with a jumbo loan in Arizona, ask your WCC loan officer what that limit is.

If you are interested in purchasing a home in any of the areas we service and it is priced within the jumbo loan limits for that county, call Wholesale Capital Corporation to request a pre-approval. If you are approved for a jumbo loan, we can walk you through the entire transaction – from application, to signing, to closing. To begin the process, contact us at (855) 640-2020 and ask to speak with a loan officer.

Wholesale Capital Corporation is not affiliated with or acting on behalf of or at the direction of the Federal Housing Authority (FHA), the Department of Veterans Affairs (VA), or any government agency or government-sponsored entity. WCC is licensed by the California Bureau of Real Estate, Broker License #01147747 and CA Finance Lender’s License #603K610. Also licensed in Arizona by the Arizona Department of Financial Institutions, MB #0926199. Equal housing lender.