What is a Jumbo Mortgage in California?
A jumbo mortgage is a mortgage loan that exceeds the level of principal eligible for purchase by the housing finance companies Fannie Mae and Freddie Mac.
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Limits
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The mortgage loans that qualify for purchase by Fannie Mae and Freddie Mac have to have a principal amount lower than a certain dollar amount ceiling. The maximum loan amount is determined by Congress and varies based on property location. These loans are called conforming loans.
California Limits
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In 2011, if you require a mortgage loan higher than $417,000 backed by a single-family property located in California, you will generally require a jumbo mortgage. However, if the property is located in certain high-cost areas in California, you will need a jumbo mortgage for a loan amount higher than $729,750 on a single-family property.
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Bigger Properties
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If you're buying a two-family, three-family or four-family residential property, you will need a jumbo mortgage if the loan amount is higher than $533,850, $645,300 and $801,950, respectively. If the bigger properties are located in high-cost areas within California, you will need a jumbo mortgage for loan amounts higher than $934,200 on a two-family property, $1,129,250 for a three-family property, and $1,403,400 in the case of a four-family unit.
Jumbo Loan Requirements
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You cannot get a jumbo loan for a second home. Jumbo loans also typically require larger down payments than conforming loans and the interest rates are higher.
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References
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