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Conforming Loan Limits for San Diego County - YouTube
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Hey, everyone.
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Today we're gonna cover
conforming loans and jumbo loans,
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and we're gonna talk about
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what the difference of those two are.
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This has been a question that has come up
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with a number of clients that
we are helping buy homes,
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and also that are getting
ready to build homes,
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and wanted to address this.
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So what is the difference
between a conforming loan
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and a jumbo loan, and
how will that affect you?
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So the first thing is
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is there is a conforming
loan limit that is given.
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It's updated typically every year.
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The government will update this number
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and it's very specific to
the location where you live.
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So if you're getting ready
to build in a certain area
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or buy in a certain area, you wanna know,
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actually, look up
specifically that county.
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So if we're talking San Diego County,
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you would look up San Diego
County conforming loan limits
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and then put in the year, so 2021.
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So if we were doing that this year,
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we would have a conforming loan limit
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specifically to San
Diego County of $753,250.
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It's 2021.
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Now, the actual conforming
loan limit for California
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is $548,250, so a lot lower,
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$200,000 lower almost for California
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is compared to San Diego County.
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So there's higher price markets
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like the San Diego County market
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and those are gonna have
a higher conforming limit,
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loan limit that you can go to.
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So now what is a conforming loan limit?
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That's the limit that they
put on, it's a guideline.
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So the lenders that
are Fannie and Freddie,
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they can sell those
out on the open market.
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They meet Fannie, Freddie guidelines
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so they're able to resell those
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after those loans are given out
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so they need to abide by
certain underwriting guidelines
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as well as a loan limit,
and when they do that
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and they stay at or below
that conforming loan limit,
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they're able to package
those and sell 'em,
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so that's what that limit is for.
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When you exceed that limit,
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you're gonna be looking at
what's called a jumbo loan
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and the jumbo loan would
be anything above that.
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So when you get into the jumbo loans,
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you're gonna pay a little
bit more in your rate.
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So today, roughly the rate is about three,
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just a little above three
for a conforming loan,
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and you're right now, the jumbo loans are,
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you're paying about a 10th
of a point more this year,
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about 3.13, 3.15, roughly, so,
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and where the conforming
loans are 3.03, 3.04.
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So there's a little bit of a,
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you're gonna have to pay a
little bit more for a jumbo loan,
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and then you're also,
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a lot of times you'll pay
a little bit more points
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on the front end to get them,
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and then the underwriting guidelines
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are gonna be a little bit tougher,
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so they're gonna look for more reserves,
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they're gonna look more at your employment
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and make sure that you
are a more solid borrower
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and you'll be able, so that
way they can sell that as well,
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but they're selling to somebody else
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so they have to make sure that
that meets their guidelines
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and they're a little bit tougher to meet.
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So that is kind of a
brief rundown on that.
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So to recap, we're going back
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and we're gonna say that
the conforming loan limits
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for California, 548,250,
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those are gonna be the
lowest conforming loan limits
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at any of the counties in California.
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And then it will increase
upwards depending on the areas,
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like San Diego County,
753,250 conforming loan limit.
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Anything over that is gonna be a jumbo.
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So make sure you check
your area where you're at.
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Check the year, specifically,
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'cause that'll adjust every single year,
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and then make sure you
check with your lender
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because you're gonna wanna
make sure the points,
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check the rates on a conforming
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versus a non-conforming loan, jumbo loan
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so you can determine if it makes sense
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to if you're building a project,
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that you need to stay
below a certain limit
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in order to qualify for your loan.
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So, all right, so I hope that helps.
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If you have more questions,
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visit our website at tfgonline.com
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and get a ton of information
on building custom homes,
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ADUs, remodeling your home.
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So thanks for your time and
have a great rest of your day.
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