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in Alhambra, CA
Alhambra sits in a price zone where many buyers bump up against conventional loan limits. The difference between these two loan types comes down to one number: how much you're borrowing.
Conventional loans cap at $806,500 for single-family homes in Los Angeles County in 2024. Anything above that requires a jumbo loan with different rules and stricter underwriting.
Conventional loans follow Fannie Mae and Freddie Mac guidelines. You can put down as little as 3% with decent credit, though you'll pay PMI until you hit 20% equity.
Most Alhambra buyers use conventional financing for condos and single-family homes under $800K. Rates are competitive because these loans get sold to the secondary market in bulk.
Credit requirements start at 620, but realistically you want 680+ for the best pricing. Debt-to-income ratios can stretch to 50% with strong compensating factors.
Jumbo loans aren't backed by Fannie or Freddie, so lenders hold more risk. That translates to tighter approval standards and bigger down payment requirements.
Most jumbo lenders want 10-20% down depending on loan amount and credit strength. You'll need reserves too—typically 6-12 months of payments in the bank after closing.
Credit scores below 700 make jumbo loans expensive or impossible. Lenders scrutinize income documentation more carefully and keep DTI limits around 43% in most cases.
The loan limit divide is the obvious split, but approval requirements differ more than most buyers expect. Jumbos demand stronger credit, larger reserves, and lower debt ratios.
Rate spreads vary by market conditions. Sometimes jumbo rates run slightly higher, sometimes they're competitive with conventional. Right now they track close together for well-qualified borrowers.
PMI is another major difference. Conventional loans require it under 20% down, but jumbo lenders often avoid PMI entirely by structuring 80-10-10 piggyback loans instead.
If your purchase price stays under $806,500, conventional is usually the better path. Lower down payment options and more forgiving credit standards make approval easier.
Above that threshold, you're in jumbo territory whether you like it or not. Focus on building reserves and keeping your credit above 720 before shopping for homes over $800K.
Some buyers right at the limit get creative with down payments to stay conventional. Putting 20% down on a $950K home keeps your loan at $760K—well within conforming limits.
$806,500 for single-family homes. Los Angeles County uses the high-cost conforming limit set by FHFA.
Some lenders allow it with strong credit and reserves. Expect higher rates than 20% down scenarios.
Not always. Well-qualified borrowers often see jumbo rates competitive with conventional pricing. Rates vary by borrower profile and market conditions.
Conventional minimums start at 620; jumbos typically require 700+. Higher scores unlock better rates on both.
Yes, by putting 20% down or using an 80-10-10 structure. Jumbo lenders often use piggybacks to avoid mortgage insurance.
Typically 6-12 months of mortgage payments after closing. Higher loan amounts demand more reserves in the bank.