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in Burlingame, CA
Burlingame's real estate market presents unique financing challenges for homebuyers in San Mateo County. Understanding the difference between conventional and jumbo loans helps you choose the right mortgage for your property purchase.
Conventional loans work well for moderately priced homes, while jumbo loans finance properties that exceed federal lending limits. Both options serve Burlingame buyers, but they differ significantly in requirements, rates, and approval criteria.
Conventional loans follow guidelines set by Fannie Mae and Freddie Mac, making them the most common mortgage type. These loans aren't backed by government agencies, so lenders assume more risk and set their own qualification standards.
You can put down as little as 3% on a conventional loan, though 20% down avoids private mortgage insurance. Credit score requirements typically start at 620, with better rates available for scores above 740.
Conventional loans work for primary residences, second homes, and investment properties. They offer predictable terms and widespread lender acceptance throughout San Mateo County.
Jumbo loans exceed the conforming loan limits established by the Federal Housing Finance Agency. Because these loans can't be sold to Fannie Mae or Freddie Mac, lenders keep them in their own portfolios and face greater risk.
Qualification standards for jumbo loans are stricter than conventional financing. Expect minimum credit scores around 700, larger down payments of 10-20%, and lower debt-to-income ratios.
Jumbo loans allow you to finance luxury properties and high-value homes common in Burlingame. Rates vary by borrower profile and market conditions, but jumbo rates have become increasingly competitive with conventional options.
The primary distinction is loan amount. Conventional loans stay within conforming limits, while jumbo loans exceed those thresholds for expensive properties. This fundamental difference drives all other variations between the two products.
Jumbo loans demand stronger financial profiles. Lenders want higher credit scores, larger cash reserves, and lower debt ratios. You might need 6-12 months of mortgage payments in savings, while conventional loans require less documentation.
Interest rates differ between the two loan types, though the gap has narrowed recently. Conventional loans historically offered lower rates, but competitive jumbo programs now exist for well-qualified borrowers in markets like Burlingame.
Your purchase price determines which loan type you need. If your Burlingame home costs less than the conforming loan limit, conventional financing makes sense. Properties exceeding that threshold require jumbo financing.
Consider your financial position beyond just the purchase price. Jumbo loans reward borrowers with excellent credit, substantial savings, and low debt. If you meet these criteria, jumbo financing opens doors to higher-priced properties.
Working with a California mortgage broker helps you evaluate both options. They can assess your qualifications, compare current rates, and structure your loan for approval. SRK Capital serves Burlingame buyers with both conventional and jumbo financing solutions.
Conforming limits vary by county and change annually. San Mateo County has higher limits than many areas due to elevated home prices. Contact a local lender for current year thresholds.
Some lenders offer jumbo loans with 10-15% down for highly qualified borrowers. Lower down payments typically require excellent credit scores and substantial cash reserves.
Not necessarily. Rates vary by borrower profile and market conditions. Well-qualified borrowers may find competitive jumbo rates comparable to conventional financing.
Yes, both conventional and jumbo loans can finance investment properties. Expect higher down payment requirements and stricter qualification standards for non-owner-occupied homes.
Most lenders require 6-12 months of mortgage payments in liquid reserves for jumbo loans. Higher-priced properties may demand even greater cash cushions for approval.