Conforming loan limits are set county by county. Borrowers who buy a home and finance it with a conforming loan amount (loans below $548,250) enjoy slightly lower interest rates compared to a jumbo loan amount. In all but one county in Florida, the conforming loan limit applies – This limit applies to cities such as Miami, Orlando, Tampa, and Jacksonville. The other county is Monroe County with a conforming loan limit that is slightly higher.
One factor which can affect the interest rate on a mortgage is the home buyer’s down payment. Conforming loans ask for a minimum down payment of 3% of the sales price. There are also low down payment jumbo loan programs that require a down payment of only 5% of the sales price as long as the loan amount doesn’t exceed $2.0 million. Another jumbo financing options require a minimum 10% down up to $3.0 million.
Regular VA loans are of course available up to 100% as long as the borrower’s loan limit under the conforming loan limits. VA jumbo loans are also available up to $1.5m to eligible vets nationwide. The required down payment for this program will vary based on the loan amount, read the complete VA Jumbo Loan Guide for more info.
High net worth buyers typically prefer to keep as much of their capital working for them. When financing a jumbo home, putting less than 20% down means preserving capital which can be used for other investments. When you consider the still relatively low-interest rate market for jumbo loans along with a low down payment, the purchase is highly leveraged. For highly qualified jumbo borrowers, this can be a good strategy financing a luxury home while preserving cash.
It’s best to speak with a loan specialist to discuss all your options. However, if you are looking at the jumbo market and have excellent credit, you probably have more options available to you than you originally thought. The jumbo market has evolved over recent years and today offers some very competitive programs. To learn more, just call us or submit the info request form on this page.