Home Buying in Del Mar>Question Details

Tristan Runy…, Home Buyer in San Diego, CA

Financing Question (Conforming, Jumbo, etc)

Asked by Tristan Runyan, San Diego, CA Sun Feb 1, 2009

Hello Everyone! First time poster, and hoping for some answers as I get closer to my first home purchase. I have strong cash reserves, a credit score of 790, no debt and a first time home buyer. While I haven't found my ideal house yet I am looking at a single family home in the $700k to $900k range. One of my concerns is around financing. Given my strong financial background, I assumed I could get a good 5% 30-yr fixed if I put down 20 or 30%. But a friend of mine recently told me I can only acquire that rate for a loan up to $417,000. So If I was to purchase a $800k house, and put $160,000 down, then the $640,000 loan would have to be a "jumbo" rate, which would have a significantly higher interest rate! Is this really the case?! I just assumed I would be the ideal first-time home buyer, and was really looking forward to locking in a low interest rate in what I think is starting to become a good time to buy a house. Would love any advice.

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Seems to be old information. FHA limit now should be 697,500 for San Diego county.
0 votes Thank Flag Link Wed Oct 6, 2010

I am confident that I can help you find a suitable home in your price range in Del Mar. I am also confident that our in house lender Wells Fargo can design a loan for you with a competitive rate! Please contact me to discuss in more detail. John@prusd.com Prudential California Realty / Del Mar.
Web Reference: http://close2thecoast.com
0 votes Thank Flag Link Wed Oct 6, 2010
There are many different products out there that may service your needs. Also what is your profession as you may be able to qualify for certain lenders special programs. To see what you qualify we would have to take an application and see what your exact debt to income ratio is and if there is a co borrower or if it is a possibility for you. Also there are 97% programs with great rates that are FHA. Once again, tell me if your friend is a loan officer and did a Debt to income qualification. If you need help please call me and i can explain to you.
Jenny Talasazan
0 votes Thank Flag Link Tue Aug 11, 2009
You are the ideal first time buyer, assuming you do a "full document loan" and your loan doesn't go over $625,000 I think is the limit for FHA approved loans . You would need to put more down for the "conforming loan" ($417,000) and the jumbos aren't that much higher currently. The interest rates change daily, and you can usually "buy down the rate" . Banks are scared and very careful about the lending rules now (too bad they weren't for the last 10 years.. we wouldn't be in this mess now)

I'm in Toluca Lake California, and I could sell in Del Mar, if you found the property, but I'm sure a good Realtor there could help you

We don't get paid to be a buyers agent...only when we close an escrow.

Sheryl Appleton (818) 422-0612
0 votes Thank Flag Link Sun Feb 1, 2009
Tristan, your friend is correct. There is about a 1.6% difference between conforming and jumbo pricing. This is because the conforming loans are now backed by Freddie/Fannie, jumbos are not. Mortgage backed bond investors have no taste for jumbos these days due to the fact they are not backed by Freddie/Fannie. Until confidence is restored to jumbo bonds, we will continue to see a wide pricing disparity.

From an investor perspective, you can understand why they prefer investing in conforming bonds rather than jumbo bonds.

This provides a quick background on the dynamics of Mortgage Backed Securities:

Best, Steve
0 votes Thank Flag Link Sun Feb 1, 2009
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