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in Sonoma, CA
Sonoma's real estate straddles a critical financing line. Many homes exceed the $766,550 conforming loan limit, pushing buyers into jumbo territory whether they planned for it or not.
The difference between these loans affects your rate, down payment, and monthly cost. Understanding which loan you need—and which you qualify for—determines your buying power in wine country.
Conventional loans follow Fannie Mae and Freddie Mac guidelines. They offer the most competitive rates and flexible down payment options for homes under the conforming limit.
You can put down as little as 3% with strong credit. PMI drops off at 20% equity. These loans are standardized, which means faster underwriting and fewer surprises at closing.
Rates vary by borrower profile and market conditions. Most conventional borrowers in Sonoma need 620+ credit and a 43% debt-to-income ratio to qualify for the best pricing.
Jumbo loans finance anything above $766,550. They're portfolio products, meaning lenders set their own rules instead of following Fannie Mae guidelines.
Expect stricter requirements: 700+ credit is standard, and most lenders want 10-20% down minimum. You'll need significant cash reserves—typically 6-12 months of payments in the bank after closing.
The upside? No loan limit ceiling. Whether you're buying a $900,000 cottage or a $3 million estate, jumbo financing scales with the property value.
Rates used to punish jumbo borrowers hard. That gap has narrowed—sometimes jumbo rates actually beat conventional when you have excellent credit and 20%+ down.
Underwriting is where you feel the real difference. Conventional loans run through automated systems. Jumbo loans get manual review, meaning longer timelines and more documentation requests.
Down payment flexibility separates them most. Conventional lets you start at 3-5%. Jumbo lenders rarely go below 10%, and most prefer 20% to avoid higher rates and additional overlays.
Your home price makes the first cut. Under $766,550? You're choosing conventional unless you want jumbo's specific features. Above that threshold, jumbo is your only conforming option.
Financial strength matters more for jumbo. If you're stretching to qualify, conventional is safer—more forgiving credit requirements and lower reserves. Strong W-2 income and 20% down? Jumbo might actually save you money.
Talk to a broker who can shop both across multiple lenders. Jumbo pricing varies wildly between banks. We've seen rate differences exceeding 0.5% on identical borrower profiles.
$766,550 for single-family homes in 2024. Anything above that requires jumbo financing regardless of your qualifications.
Some lenders allow 10% down on jumbo loans. Expect higher rates and stricter credit requirements below 20% equity.
Not anymore. Strong borrowers with 20%+ down often see jumbo rates match or beat conventional pricing in current markets.
Most lenders require 6-12 months of mortgage payments in liquid assets after closing. Higher loan amounts may require more reserves.
Yes, with 20% down you avoid PMI entirely. Below 20%, you'll pay PMI until you reach 78% loan-to-value through payments or appreciation.
Conventional loans typically close in 21-30 days. Jumbo loans take 30-45 days due to manual underwriting and additional documentation requirements.