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in Monrovia, CA
Monrovia sits at an interesting price point where some buyers qualify for conventional financing while others need jumbo loans. The difference comes down to loan limits set by the Federal Housing Finance Agency.
Most Los Angeles County properties stay under the conforming limit, but Monrovia's mix of historic bungalows and hillside estates means you might need either option. Your property value determines which path you'll take.
Conventional loans work for most Monrovia buyers because they follow standard underwriting rules. You'll need decent credit and income documentation, but rates stay competitive since Fannie Mae and Freddie Mac buy these loans.
These mortgages cap at the conforming limit, which in Los Angeles County runs higher than most of the country. Down payments start at 3% for first-time buyers, though you'll pay PMI below 20% down.
Jumbo loans kick in when your purchase price exceeds conforming limits. Monrovia properties in the foothills or historic Old Town sometimes hit this threshold, requiring non-conforming financing.
Expect stricter requirements than conventional loans. Most lenders want 10-20% down minimum, credit scores above 700, and reserves covering 6-12 months of payments. Rates run slightly higher because these loans carry more risk.
The loan limit drives everything else. Conventional loans can't exceed the conforming cap, while jumbo loans start where conventional loans stop. In Los Angeles County, this split happens at a higher threshold than most markets.
Underwriting gets tougher with jumbo loans. Lenders scrutinize income more carefully, require larger reserves, and expect stronger credit. Conventional loans follow standardized rules that make approval more predictable.
Rate differences matter over 30 years. Jumbo rates typically run 0.25-0.50% higher than conventional rates, though spreads tighten when you bring 25%+ down. Rates vary by borrower profile and market conditions.
You don't choose between these options — your purchase price chooses for you. If your Monrovia home costs less than the conforming limit, conventional financing makes sense. Above that threshold, you need a jumbo loan.
Some buyers split the difference with a piggyback structure: a conventional first mortgage at the conforming limit plus a second loan for the excess. This works when you want to avoid jumbo underwriting but can't put enough down to stay conventional.
I see Monrovia buyers qualify for conventional loans on most properties under $1.5M. Above that, especially in Bradbury borders or canyon homes, jumbo financing becomes necessary. Get pre-approved early so you know which camp you're in.
The limit changes annually based on home price appreciation. It runs higher than the baseline national limit due to Los Angeles County's elevated housing costs.
Yes, though most lenders require 10-15% minimum. Expect higher rates and stricter credit requirements with lower down payments on jumbo loans.
Usually, but the spread narrows with strong credit and larger down payments. Some lenders offer competitive jumbo rates to well-qualified borrowers.
Conventional loans typically close faster because underwriting follows standardized rules. Jumbo loans need extra documentation review and verification time.
Only if your loan balance falls below the conforming limit through paydown or appreciation. Refinancing costs need to justify the switch.