Jumbo Loans

What Is A Jumbo Loan?

Any loan amount in the Silicon Valley that is over $417,000 can be considered a Silicon Valley Jumbo Mortgage Loan. There are many different lenders offering jumbo loans – even though the credit crunch may be in full swing, people with good credit and who can document their income can qualify for a jumbo loan.

Generally speaking, lenders will have a “high-limit” that jumbo mortgages can go to, but you will generally find that it will vary from lender to lender. If you call 5 different lenders, you will generally hear 5 different maximum loan amounts. Generally speaking, we have found that the average maximum loan amount for the Silicon Valley is about $2,000,000.

Silicon Valley Jumbo Mortgage Loans: Interest Rates

Because Silicon Valley jumbo mortgage loans are often times a “portfolio product” — meaning the lender who originates the loan will actually hold the loan and service it as well.  Interest rates on jumbo loans are generally about 1/4% – 1% higher than those loans on conforming-under-$417,000 loan amounts. In other words, if a Fannie Mae conforming, 30-year fixed rate is at 6%, you can expect your jumbo mortgage rate to be at 6.25% or 7%.

That said, there is no set rule on what the jumbo mortgage loan rates are set at – so it is wise to shop around. For example, if a lender wants to increase their jumbo loan portfolio, they may lower rates so that they are the same as a Fannie Mae loan. On that same day, another lender may want to reduce the number of jumbo loans in their portfolio and will raise rates accordingly.

Choose The Right Jumbo Lender in the Silicon Valley

Not every lender in the Silicon Valley is able to help you with getting into a jumbo loan. Be sure when you speak with your loan officer that you ask them about whether or not they can actually do a jumbo loan here in the Silicon Valley. You might be surprised to learn that many of the out-of-town lenders who say that they can do a jumbo loan here in the Silicon Valley, actually might not be able to.