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in El Monte, CA
El Monte buyers face a clear decision point when their purchase price crosses the conforming loan limit. Most properties here fall under the threshold, making conventional loans the standard choice.
Jumbo loans enter the picture when you're buying above $806,500 in Los Angeles County. The underwriting gets stricter and your qualification requirements change significantly.
Conventional loans follow Fannie Mae and Freddie Mac guidelines, with maximum amounts up to $806,500 in Los Angeles County. You can put down as little as 3% on these loans, though you'll pay PMI until you hit 20% equity.
Credit score requirements start at 620, but realistically you need 680+ to get competitive rates. Debt-to-income ratios max out at 50% on some programs, giving you more flexibility than jumbo options.
These loans dominate El Monte's market because most properties sit well below the conforming limit. Sellers know conventional financing closes reliably, which strengthens your offer.
Jumbo loans finance purchases above $806,500, stepping outside Fannie and Freddie's backing. Lenders hold these mortgages on their own books, which means they write their own rules and price for their own risk.
Expect to put down at least 10-20% depending on the lender and loan amount. Credit scores need to be 700+ minimum, with most competitive pricing reserved for 740+ borrowers.
Cash reserves matter heavily here—most lenders want 6-12 months of mortgage payments sitting in your account after closing. Your debt-to-income ratio typically can't exceed 43%, sometimes lower for higher loan amounts.
The loan limit splits these two products completely. Conventional loans cap at $806,500 in LA County, while jumbo loans start there and go as high as lenders will underwrite—often $3-5 million with the right profile.
Down payment flexibility differs sharply. Conventional borrowers can start at 3%, while jumbo lenders rarely go below 10%. The reserve requirements tell the same story—conventional loans often need zero reserves, jumbo loans demand substantial cash cushions.
Rate differences depend entirely on your borrower profile. Strong jumbo borrowers sometimes get better rates than marginal conventional borrowers. Rates vary by borrower profile and market conditions, but expect tighter pricing windows on jumbo products.
If your El Monte purchase stays under $806,500, conventional financing almost always makes more sense. You get more flexibility on down payment, easier qualification standards, and faster underwriting.
Jumbo loans become necessary above the conforming limit, not optional. Before you shop in that price range, make sure you have 20% down, strong credit, and significant reserves. Most El Monte buyers won't need jumbo financing given local property values.
The in-between scenario hits when you're buying just above $806,500. Sometimes a larger down payment drops you into conventional territory, saving hassle and potentially money. Run both scenarios before committing to a purchase price.
The conforming loan limit in Los Angeles County is $806,500 for 2024. Any loan amount above that requires jumbo financing.
Some lenders allow 10% down on jumbo loans, but you'll need excellent credit and substantial reserves. Most competitive pricing requires 20% down.
Not always. Strong jumbo borrowers with 20%+ down and 760+ credit sometimes beat conventional rates. Your profile determines pricing more than the loan type.
Most jumbo lenders require 6-12 months of full mortgage payments in reserves after closing. Higher loan amounts may push this to 18-24 months.
Yes. If your purchase price is $900,000, putting down $100,000 drops your loan to $800,000—under the conforming limit and eligible for conventional financing.