When thinking of jumbo loans in Morro Bay, CA, the first thing that probably comes to mind is how it differs from conforming loans. The simple answer is that they are large loans that fall above the federal loan limits, which determine whether mortgages are eligible for purchase by Fannie Mae and Freddie Mac.
If you are exploring the possibility of a jumbo loan application for your home purchase, knowing the following facts may come in handy when the big day comes. So, take note of the following:
Jumbo loan limits in California still vary. Expect variations in jumbo loan limits from one county to another. In San Luis Obispo County, where Morro Bay is located, conforming loan limits are: $805,000 (one-unit); $1,030,550 (two-unit); $1,245,700 (three-unit); $1,548,100 (four-unit). If you need bigger than that for your home purchase, you may consider applying for jumbo loans.
Lenders have similar requirements for jumbo loans in Morro Bay, CA. There should be no problem if you are applying at multiple lenders as most of them will have the following requirements:
- FICO of 720 or higher
- Proof of income
- A debt-to-income ratio of less than 43%
- Cash reserves that would cover the principal, interest, property tax, and homeowners insurance
- Other documents such as tax returns, bank statements, proof of assets, and debts
- Appraisal to determine the home’s value
Jumbo loans are considered conventional. Government agencies such as FHA, VA, or USDA do not back jumbo loans. That means they are considered “conventional,” albeit non-conforming.
Who are the best candidates for jumbo loans? Those who want to buy in a place where no lower-cost housing alternatives are available, or if you are looking for a higher-end home purchase.
Jumbo loans are ideal in the following situations:
- You are funding a luxury home
- You are financing a home in a high-cost area
- Your credit rating is healthy, if not exceptional
- You are earning quite a good income
Online looking for a reputable mortgage company that can help your application for jumbo loans in Morro Bay, CA? Contact us here at HomePlus Mortgage today.