The California real estate market seems like it might be turning around. Buyers are starting to buy homes and in many areas on the low end of the market there are bidding wars on homes.
But what about the higher end homes?
The higher end homes are selling – yes – but the availability of jumbo loan financing has been somewhat of a problem. Lenders who used to loan out 100% of a property’s value up to $2 million 2 years ago are no longer doing that.
But what are they doing?
California Jumbo Loans: Interest Rates
Generally speaking, for 3/1, 5/1 and 7/1 jumbo ARM products, you can expect interest rates to be in the 5% -6% range and there are a small handful of lenders active in this market.
California Jumbo Loans: Income Requirements
If you are considering getting a California jumbo loan, be prepared to fully document your income. “Stated income” loans no longer exist. You should plan on your new monthly mortgage payment to be no more than 35% of your income.
California Jumbo Loans: Credit Score Requirements
Credit scores are more important than ever. If you have above a 750 credit score and meet all of the other criteria, you should be able to qualify for almost any kind of jumbo product. If your credit score is below a 750, it may be difficult to get jumbo financing.
California Jumbo Loans: Loan To Value Requirements
Generally speaking, the higher the loan amount, the lower the loan-to-value the lender will allow. Here are just a few general LTV guidelines:
- For loans up to $900,000 expect the loan to value ratio to be around 75%.
- For loans up to $1,200,000 expect the loan to value ratio to be around 60%.
- For loans up to $1,500,000 expect the loan to value ratio to be around 50%.
California Jumbo Loans: Still Available
Yes, people are buying homes. Yes, people are even financing some of those homes with a jumbo loan. Yes, lenders are still lending jumbo loans.
It is just tougher than it was 2 years ago to get a jumbo loan – no matter where you live!
