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in Santa Fe Springs, CA
Santa Fe Springs buyers face a key decision when their target price approaches conforming loan limits. Conventional loans work up to $806,500 in Los Angeles County, while jumbo loans handle anything above that threshold.
The choice isn't just about loan size. These programs have different credit requirements, down payment rules, and rate structures that can swing your monthly payment by hundreds of dollars.
Conventional loans follow Fannie Mae and Freddie Mac guidelines. You can put down as little as 3% with decent credit, though 20% down eliminates mortgage insurance and usually gets you the best rate.
Credit scores above 740 unlock the tightest pricing. Most lenders want to see two years of stable income and a debt-to-income ratio under 45%, though some flexibility exists for strong borrowers.
These loans offer the most predictable approval path. Underwriters see thousands of these files, so there's less variation in how different lenders interpret the guidelines.
Jumbo loans kick in when you exceed $806,500 in Los Angeles County. These aren't government-backed, so each lender sets its own risk tolerance and pricing model.
Most jumbo lenders want 20% down minimum, though some accept 10% with stellar credit. You'll typically need a 700+ credit score, closer to 740 for competitive rates.
Expect stricter scrutiny on income documentation and reserves. Lenders often require 6-12 months of housing payments in the bank after closing, especially on purchases above $1.5 million.
The conforming limit creates a sharp divide. A $795,000 loan follows conventional rules with predictable pricing. An $820,000 loan enters jumbo territory with tighter standards and lender-specific overlays.
Rate differences fluctuate with market conditions. Sometimes jumbos price better than conventionals because portfolio lenders compete aggressively. Other times you'll pay 0.25% to 0.50% more for jumbo financing.
Down payment flexibility separates these programs clearly. Conventional loans let qualified buyers start at 3%, while most jumbo programs draw a hard line at 20%. That's a $161,000 difference on an $806,500 purchase.
Your purchase price makes this decision for you most of the time. Buying under $806,500? Conventional wins on flexibility and cost. Above that threshold? You need jumbo financing.
The gray zone exists for buyers who can adjust their price range. If you're targeting $825,000 homes, consider looking at $795,000 properties instead. The conventional loan advantages often outweigh the smaller house.
For buyers set on properties above the conforming limit, shop multiple jumbo lenders aggressively. Rate spreads between lenders can hit 0.375% on the same borrower profile because each bank prices jumbo risk differently.
You have options. A larger down payment can keep you under $806,500, or you can go jumbo if the property's worth it to you.
Not always. Market conditions shift, and sometimes portfolio lenders price jumbos competitively to gain market share.
Some lenders offer 10% down jumbo programs for borrowers with 740+ credit and strong income documentation.
Most lenders want 6-12 months of mortgage payments in the bank after closing. Higher loan amounts require more reserves.
Conventional loans have standard PMI options. Jumbo loans rarely allow PMI, so 20% down is typically required.