Jumbo Mortgage – California

If you are buying a home in California, you know prices are higher than in most parts of the country. This brings up the issue of the jumbo loan in California.

The mortgage loans industry is unique compared to other financial markets. Why? Well, it has to do with the federal government. Specifically, the government provides mortgage financing to individuals by guaranteeing the debt owed to lenders, much the way a parent might do when co-signing a loan for child. Loans that the government will secure are known as conforming loans.

Unfortunately, the government does not provide much assistance to mortgage applicants in California. The various government programs carry cap restrictions over a certain amount depending on the specific agency offer the program. The top cap for a California mortgage is in the $400,000 range. Any loan application for an amount in excess of this figure does not qualify.

Obviously, a majority of homes in California require financing in excess of the government caps. Such loans are known as non-conforming or jumbo mortgage loans. With a jumbo mortgage in California, a lender is a bit stricter in evaluating your application because it knows the government will not back it. As a result, you can expect to pay a bit higher interest rate than with a conforming loan.

A jumbo loan in California is a form of private financing. There are tons of lenders that offer them, but the terms for the jumbo loans vary dramatically. Simply put, you need to shop the loan to various lenders to find the best deal. Even a quarter percent difference in interest rates can save you tens or hundreds of thousands of dollars over the life of the loan.

We shop jumbo loan options to a vast number of lenders for our clients. If you want to get the best deal, fill out a quick application above or call us to get a free, no obligation consultation.