Jumbo Home Loans in San Jose: What to Know
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Are you interested in jumbo home loans in San Jose? Read on to find out everything you need to know for your home buying needs.
The perfect San Jose property could be yours. There’s only one problem - a conventional mortgage won’t cover the cost.
That’s where a jumbo home loan can help.
Jumbo mortgages are the solution for many would-be homeowners in high cost of living areas like San Jose. When a normal loan limit won’t do, you need a jumbo loan with a higher limit. Even in California, the loan limit ranges depending on where in California you are.
Confusing, isn’t it? But it doesn’t have to be. If you’re looking for more information on jumbo home loans in San Jose, here’s everything you need to know.
What Is a Jumbo Loan?
When a regular loan isn’t enough, you need a jumbo loan.
As the name implies, a jumbo loan is a mortgage used for more expensive properties. Generally, the limit for a traditional loan is $647,200, but this may vary depending on where you live.
If you’re buying an expensive property or are looking to purchase a home in a high-cost-of-living area like San Jose, you may need a jumbo loan. The maximum amount for a jumbo loan may vary from lender to lender.
A Jumbo vs Conventional Loan
Jumbo home loans aren’t as common as conventional loans, and not every lender offers them. As a result, jumbo loan requirements can be stricter than conventional loan requirements.
Check out our full comparison of jumbo loans vs conventional loans for more details.
In general, a jumbo loan will require:
- A high credit score (typically 700 or higher)
- Minimum down payment of 10-30%
- DTI (debt to income) ratio of 38-43%
In comparison, a conventional home loan may require a minimum credit score of only 620, with a 3% down payment and a max DTI of 50%.
Jumbo loans may also have higher closing costs. This is due to manual underwriting and additional appraisals.
Your DTI is the ratio of total debt payments divided by gross income. For an easy way to calculate your DTI, you can use an online DTI ratio calculator.
The debts included in calculating your DTI include your existing mortgage, HOA fees, credit card debts, and other loans. Income can include salary, social security or pension payments, and other investments and savings.
Calculating Your Jumbo Loan Payments
If you’re unsure about jumbo loan payments, check out our jumbo loan calculator. Input information such as the home value, down payment, loan terms, and a few other things to get an instant estimate of your payments.
Jumbo Home Loans in San Jose
If you’re looking to buy a home in the San Jose or Santa Clara area, you may need a jumbo loan. But jumbo home loans aren’t always easy to qualify for - that’s why you need an expert from New American Funding.
If you’re looking into jumbo home loans in San Jose and the surrounding area, we can help guide you through the process. We’ve been helping customers afford their dream homes since 2002.
When you’re ready to purchase your dream home, contact us.
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