Jumbo Loans in Orange County, CA
A jumbo loan is a mortgage that exceeds the conforming loan limit set by Fannie Mae and Freddie Mac. In high-cost areas like Orange County, many homes cost more than the conforming limit, so jumbo loans are common.
If you are buying a luxury home or a property in a premium neighborhood, a jumbo loan is likely what you need.
Who it's a good fit for
Jumbo loans are for buyers purchasing homes above the conforming loan limit. In Orange County, that includes a large portion of the market. You are a good fit for a jumbo loan if you have strong credit (700 or above), a solid down payment (10 to 20 percent or more), stable income, and sufficient reserves. Jumbo loans work for primary residences, second homes, and investment properties, as long as you qualify.
Who it's not a fit for
Jumbo loans are not a fit if you are buying a home below the conforming loan limit, since a conventional loan would be simpler and potentially cheaper. They are also not a fit if your credit is below 700, you have a small down payment, or your debt-to-income ratio is high. Jumbo lenders have stricter requirements because these loans cannot be sold to Fannie Mae or Freddie Mac, so the lender holds the risk.
Requirements
Minimum Credit Score
700 or above (some lenders accept 680)
Down Payment
10 to 20 percent minimum, depending on the lender and loan amount
DTI Limit
Typically 43% or below, though some lenders allow up to 50%
Reserves
6 to 12 months of PITI, depending on the loan amount and lender
Pros and cons, stated honestly
Advantages
Things to consider
Costs involved
Jumbo loan costs vary significantly by lender since each sets its own guidelines. Some jumbo loans do not require PMI even with less than 20 percent down, which can save you money compared to a conforming loan with PMI. However, the interest rate may be slightly higher to compensate for the lack of mortgage insurance. Closing costs are similar to conventional, typically 2 to 5 percent of the loan amount, but can be higher on very large loans. I shop jumbo loans across multiple lenders to find the best combination of rate, terms, and costs for your situation.
The process and rough timeline
Financial Review
1 to 3 daysJumbo loans require a thorough review of your finances. We gather your income docs, asset statements, and credit.
Get Pre-Approved
3 to 5 daysI shop your scenario across multiple jumbo lenders and get you a pre-approval with the best terms.
Find a Home and Make an Offer
Varies by buyerYou shop with your agent. A jumbo pre-approval shows sellers you have the financial strength to close.
Appraisal and Underwriting
10 to 15 daysWe order an appraisal (jumbo appraisals can be more detailed), and the lender underwrites the file.
Close and Get Your Keys
30 to 45 days totalYou sign, the loan funds, and you get the keys to your new home.