If you are looking to buy a home in California, it’s likely that you are encountering higher costs given that in 2023, home prices have increased over 7%. A positive development is the increased conforming loan limit for 2024, now reaching $766,550. In specific counties like Los Angeles and Orange County, among others, you can secure a conventional loan for amounts up to $1,149,825.
What does this mean to you?
When you are purchasing a home and your loan amount is higher than the limits above, your loan is what is called a Jumbo loan. These types of loans have different interest rates as well as many different guidelines that you must meet. With a conventional loan, you can put as little as 5% down! With a Jumbo loan, it’s more typical to see the 20% down payment requirement.
So for example, if you purchased a home for $1,210,000, in those counties, you can put down as little as
$60,500 and purchase a home. That can open the door to many families that can afford the monthly payment, but still do not have down payment for more than that 5%.
The other change is that if you are purchasing units (1-4) and are going to live in one of the units, previously you had to put down up to 25% depending on how many units. Now, you can put down as little as the same 5% and purchase a 4 unit property. So that can give you the opportunity to purchase with a lower down payment and use rental income from the other units to help qualify.
Since the rates have declined, more people are coming back into the market so understanding what’s available is critical! Please contact me for more information specific to your situation!
Call us for your free consultation: 661-295-0555.