California jumbo home loans becoming more available for qualified buyers in San Diego

By John Lefferdink

So-called

jumbo home loans

are becoming easier for qualified California homebuyers to obtain, according to a recent real estate report from the

U~T

1. Designed to finance higher-end homes, jumbo loans also tend to bear greater risk for homeowners due to limited government backing. This means that, during the height of the recession, such loans were practically nonexistent following a rash of popularity in the years leading up to the housing bust. However, recent numbers from leading banks like Bank of America and Wells Fargo show a total of $38 billion issued in the form of jumbo loans during the second quarter of 2012 – a figure that represents a 65% increase over last year. This in turn suggests that, after several extremely cautious years, banks are easing up on loan restrictions for qualified borrowers – and that move-up buyers with the means to take out substantial loans are taking full advantage. But what does this mean for the San Diego housing market, and how will local homeowners and buyers be affected?

Understanding jumbo loans

Jumbo loans earn their name by exceeding the limit permitted by government-managed mortgage backers Freddie Mac and Fannie Mae. In most parts of the country, that limit amounts to about $417,000. However, because real estate is more expensive here in San Diego, the local limit imposed by Freddie Mac and Fannie Mae is $546,250, while the FHA limit is $697,500. Mortgage industry experts tell the U~T that, with money to be made from buyers seeking more expensive real estate, both major and regional banks are beginning to shift back to the jumbo loan market – a trend that stands in sharp contrast to the past several recession-hampered years.

Of course, there’s also a catch when it comes to securing jumbo loans: as with super low interest rate loans, banks require exceptional credit history and proof of income from borrowers interested in securing loans above the federal limit. But by the same token, these restrictions pose big opportunity to qualified homeowners here in San Diego. And as the banks loosen their grip on loans for high-end properties, move-up buyers with strong credit stand poised to benefit – and walk away with the keys to a San Diego dream home.

To learn more about jumbo home loans in San Diego, or to discuss the pros and cons of taking out a large loan to buy

real estate in Rancho Santa Fe

, Del Mar, Solana Beach or any of San Diego’s North County communities, contact us at

John Lefferdink & Associates

today. Give us a call to speak with an experienced real estate agent at (858) 755-8098, or go online for more information at

www.johnlefferdink.com

.