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in San Bruno, CA
San Bruno homebuyers face an important choice when financing their property: conventional or jumbo loans. The right option depends on your purchase price and financial profile.
Conventional loans work for most home purchases, while jumbo loans handle properties that exceed federal conforming limits. Both offer competitive financing for San Mateo County buyers.
Understanding the differences helps you choose the most cost-effective option for your situation. Each loan type has distinct requirements and benefits.
Conventional loans follow limits set by the Federal Housing Finance Agency. These mortgages aren't backed by government agencies, but they meet standardized underwriting criteria.
Down payments start at 3% for qualified buyers, though 20% down avoids private mortgage insurance. Rates vary by borrower profile and market conditions.
Credit score requirements typically start at 620, with better terms available for higher scores. Debt-to-income ratios usually need to stay below 45-50%.
Jumbo loans finance properties that exceed conforming loan limits, which change annually. These mortgages require more documentation and stricter qualification standards.
Lenders take on more risk with jumbo loans, so they typically require larger down payments and stronger credit profiles. Most require 10-20% down depending on the property value.
Interest rates can be competitive with conventional loans for well-qualified borrowers. Credit scores usually need to be 700 or higher, with lower debt-to-income ratios preferred.
The primary difference is loan size limits. Conventional loans stay within FHFA conforming limits, while jumbo loans exceed these thresholds for luxury or high-cost properties.
Down payment requirements differ significantly. Conventional loans allow as little as 3% down, while jumbo loans typically require 10-20% to offset lender risk.
Qualification standards are stricter for jumbo loans. Lenders require higher credit scores, more cash reserves, and thorough documentation of income and assets.
Rates vary by borrower profile and market conditions, but well-qualified buyers may find competitive rates for both options. Jumbo loans may have slightly higher rates due to increased lender risk.
Your purchase price determines which loan type you need. If your San Bruno home exceeds conforming limits, a jumbo loan is your only option beyond paying cash.
Conventional loans work well if your purchase stays within federal limits and you have decent credit. The lower down payment options make homeownership more accessible.
Choose jumbo financing when buying higher-value properties in San Mateo County. Make sure you have strong credit, substantial reserves, and can document your income thoroughly.
Consider your long-term financial picture. Jumbo loans require more upfront capital but can finance properties that appreciate well in competitive California markets.
Conforming loan limits change annually based on FHFA guidelines. San Mateo County typically has higher limits than baseline areas due to its high-cost designation. Contact SRK Capital for current year limits.
Yes, jumbo loans don't require PMI since they're portfolio loans held by lenders. However, you'll still need a substantial down payment to qualify, typically 10-20% of the purchase price.
Not necessarily. Rates vary by borrower profile and market conditions. Well-qualified buyers often find competitive jumbo rates, sometimes matching or beating conventional options.
Most lenders require 6-12 months of reserves for jumbo loans. The exact amount depends on the loan size, property value, and your overall financial profile.
Yes, jumbo loans work for investment properties, though requirements are stricter. Expect higher down payments, stronger credit requirements, and more cash reserves than primary residence purchases.