Scott Storace - Branch Manager, 100 Pacifica Drive Ste. 140, Irvine CA 92618 NMLS #226339 949.973.0141

"From the minute you call me to the minute we close, I have your back. No hassles, no banker’s hours & quick response times." - Scott Storace

  • Home Loans up to $3,000,000
  • Interest Rate Float Down Option
 

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The Truth About Jumbo Loans

Orange County, CA – It’s without doubt that there is a public perception about jumbo loans. The automatic response is that the interest rates are steep and far more rigorous criteria must be followed in order to qualify for jumbo loans. In some respects, these notions are true, but only to a marginal extent.

First, let’s look at the interest rate that you’re likely to get with a jumbo loan. If you’re flexible, and can move forward with an adjustable rate mortgage, then you can find some really great deals. These mortgages have lower interest rates for the initial fixed period which makes jumbo loans look very appealing indeed. Overall, you’ll find that jumbo loans are around 0.750% higher in rate than a conforming loan might be. 

Naturally, a jumbo loan is never going to have the flexibility of an FHA mortgage. Some people will find it hard to meet the criteria. But again, we have to point out that meeting the criteria may only be a little harder than it would be to obtain a mortgage at a lower level. Meeting lending standards shouldn’t be too difficult if you have a decent credit record and a strong down payment to put forward. If you can gather up 20-30% of the overall value of the house, then there is a jumbo loan for you. Down payments on jumbo loans start at 20% and increase from there. With a strong credit score and liquid assets in reserve, jumbo loans are not much harder to obtain than conforming loans.

We’ve talked about the perceived & potential downsides of jumbo loans, but let’s not overlook the great benefits they can provide. Jumbo loans allow affluent homeowners access to large amounts of money. The alternative is to pay all cash or pay a significant amount of cash and take out a smaller conforming loan. But money is very cheap right now. The cheapest it has ever been and may ever be. Leveraging money for a mere 20% down with rates starting in the mid 3.000% range can lead to much greater profits. Not only can you purchase the home of your dreams but you’ll build equity quickly. And the timing couldn’t be better. Inventories in Orange County are at a 1 month supply. Prices are on the rise. The National Association of Realtors is forecasting strong appreciation in the coming years. You can keep your hard earned money working hard for you.

Of course, jumbo loans aren’t for everyone, but if you’re in that market, then you should look to find out more. You might be surprised at the possible programs available to you, and just how affordable they can be. You don’t have to keep shutting yourself off to that dream house you drive past on the way home from work every day – you might just be able to afford it!

If you have jumbo questions about jumbo loans contact me and I’ll be sure to help!

Scott Storace

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