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in Palos Verdes Estates, CA
Most homes in Palos Verdes Estates blow past the conventional loan limit of $806,500. That puts buyers into jumbo loan territory whether they planned for it or not.
The right loan depends on your purchase price and down payment. Understanding the line between conventional and jumbo loans saves you from surprises at application.
Conventional loans follow Fannie Mae and Freddie Mac guidelines. They max out at $806,500 for single-family homes in high-cost counties like Los Angeles.
You can put down as little as 3% on a primary residence. Rates stay competitive because lenders can sell these loans to government-sponsored entities.
Credit requirements start at 620, but most approvals happen at 680 or higher. You'll need two months of reserves and standard income documentation.
Jumbo loans pick up where conventional loans stop. In Palos Verdes Estates, that means most properties require jumbo financing.
Expect stricter requirements across the board. Most lenders want 10-20% down, 700+ credit scores, and 6-12 months of reserves.
Rates run close to conventional when you have strong credit and reserves. Portfolio lenders hold these loans instead of selling them, which gives you more flexibility on property types and income structures.
The loan limit divides these two products. Buy under $806,500 and conventional works. Go above that number and you're in jumbo territory.
Down payment and reserves separate them further. Conventional lets you in at 3% down with two months of reserves. Jumbo lenders want 10-20% down and six months minimum in the bank.
Credit standards tighten with jumbo loans. A 680 score gets you approved on conventional. Jumbo lenders prefer 700 or higher for their best pricing.
Your purchase price makes the first cut. Properties under $806,500 qualify for conventional. Anything above requires jumbo financing.
If you're on the border, consider your down payment. A $900,000 home with $100,000 down needs a $800,000 loan—that fits conventional limits. Same property with $50,000 down puts you at $850,000, which requires jumbo.
Jumbo loans work better when you have strong reserves and credit. If you're stretching to qualify, stick with conventional financing on a lower-priced property.
$806,500 for single-family homes. Loans above this amount require jumbo financing regardless of your down payment percentage.
Not always. Borrowers with 700+ credit and strong reserves often get rates close to conventional. Rates vary by borrower profile and market conditions.
Yes. If your loan amount stays under $806,500 after your down payment, you qualify for conventional financing even on expensive properties.
Most lenders want 700 or higher. Some approve at 680 with compensating factors like extra reserves or lower debt ratios.
Expect 6-12 months of mortgage payments in liquid assets. Higher loan amounts typically require more reserves to qualify.