When you are trying to determine what type of home loan you need in Los Angeles, one important factor to consider is the amount you need to borrow. If that amount is more than the limits set by Fannie Mae and Freddie Mac, you will require a jumbo loan. Otherwise, conventional financing should be available.
To help you figure out whether a jumbo loan in LA might be in order, here are the 2019 conventional loan limits for Los Angeles:
One Unit Limit:
Two Unit Limit:
Three Unit Limit:
Four Unit Limit:
Some of the counties surrounding LA have their conventional loan limits set lower. Take a look at the conventional loan limits for Riverside for instance:
For example, here are the 2019 conventional loan limits in Riverside:
Qualifying for a jumbo loan is a lot like qualifying for a conventional loan, only the requirements are stricter.
Your credit score and debt-to-income ratio need to be up to higher standards.
The down payment requirements for jumbo loans tend to be higher than they are for conforming loans, but they are not always higher. They can range up to around 20% for conventional loans, and up to around 30% for jumbo loans.
You will need to demonstrate through appropriate documentation that you possess at least six months of cash reserves.
Be ready to get two appraisals for the property you plan to purchase rather than just one.
As you might expect, raising your credit score, lowering your debt-to-income ratio, and documenting higher cash reserves all can work in your favor, qualifying you for more competitive LA jumbo loans.
Need help improving these metrics? I can offer you guidance for steps you can take today to give yourself the best chance of receiving competitive loan offers when you are ready to apply. If you are willing to make a higher down payment than the minimum you qualify for, this may give you the bargaining power to enhance other terms of your loan. Interest rates for jumbo loans can be very reasonable. It is just a matter of applying with the right lenders and qualifying as a competitive borrower.
The bottom line is this: It doesn’t have to be hard to qualify for a jumbo loan, and a jumbo loan doesn’t have to be more expensive in terms of interest than a conventional loan.
Are you ready to get the affordable jumbo financing you need to purchase your LA dream home? Please give me a call at (818) 601-2231 to set up a consultation. Let’s get your loan application out there and get you the keys to your new home in Los Angeles.
Shannon Christenot is an Equal Housing Lender. As prohibited by federal law, we do not engage in business practices that discriminate on the basis of race, color, religion, national origin, sex, marital status, age, because all or part of your income may be derived from any public assistance program, or because you have, in good faith, exercised any right under the Consumer Credit Protection Act. Disclaimer: Programs subject to change without notice. All borrowers must qualify per program guidelines.