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in Los Banos, CA
Most Los Banos home buyers use conventional loans because local prices typically sit well below the 2025 conforming limit of $806,500. Jumbo loans kick in when you exceed that threshold—rare here, but still relevant for larger ranches or premium properties near the San Luis Reservoir.
The choice between these two comes down to purchase price and credit profile. Conventional loans offer better rates and easier approval for homes under the limit, while jumbo loans handle higher-priced properties but demand stronger financials.
Conventional loans follow Fannie Mae and Freddie Mac guidelines, which means predictable underwriting and competitive pricing. You can put down as little as 3% with decent credit, though 20% down eliminates PMI and unlocks better rates.
Approval typically requires 620+ credit for best pricing and a debt-to-income ratio under 50%. These loans scale smoothly from starter homes to move-up properties, as long as the purchase price stays below conforming limits.
Jumbo loans finance properties above the conforming limit—think acreage estates or custom builds in Los Banos. Lenders take on more risk without Fannie/Freddie backing, so they scrutinize income, assets, and credit more carefully.
Expect to put down 10-20% minimum and show 700+ credit for competitive rates. Most lenders want to see 6-12 months of reserves after closing, proving you can weather disruptions without missing payments.
Credit standards separate these two sharply. Conventional loans approve borrowers at 620 with 3% down, while jumbo loans demand 700+ scores and larger down payments to offset lender risk.
Rates vary by borrower profile and market conditions, but jumbo loans usually price 0.25-0.75% higher than conventional at similar credit levels. That spread reflects the lack of government-sponsored backing and higher loan amounts.
If your Los Banos purchase stays under $806,500, choose conventional every time. You get better rates, easier approval, and flexible down payment options that jumbo loans can't match.
Jumbo loans make sense only when you need to exceed conforming limits—larger ranches, custom builds, or premium properties. Make sure you have strong credit, significant assets, and stable income before pursuing this route.
The 2025 limit is $806,500 for Merced County. Loans above that amount require jumbo financing with stricter qualification standards.
Some lenders approve 10-15% down on jumbo loans. You'll need excellent credit and strong reserves to qualify at lower down payment levels.
Usually, yes—jumbo rates run 0.25-0.75% higher. Rates vary by borrower profile and market conditions, so compare offers from multiple lenders.
Most lenders want 6-12 months of housing payments in liquid assets after closing. Higher loan amounts may require larger reserves.
Yes, as long as the purchase price stays under $806,500. Conventional loans cover rural properties and larger parcels within conforming limits.