Jumbo Mortgage Insights for Homebuyers in Ventura County

Property prices still increasing in many parts of California, Ventura County included. Many homebuyers find themselves needing more than the maximum conforming loan limits allow. This is where jumbo mortgages come into play.

So why choose a jumbo loan? The most obvious reason is that it allows for greater flexibility in terms of purchasing power. With traditional conforming loans, homebuyers are limited by the maximum loan amount set by the government-sponsored entities. But with jumbo loans, there is no such limit, allowing buyers to borrow much greater amounts.

Understanding Jumbo Loans:

Jumbo loans are mortgage loans that exceed the conforming loan limits set by the Federal Housing Finance Agency (FHFA). Because they cannot be sold to Fannie Mae or Freddie Mac, jumbo loans typically come with stricter underwriting requirements and slightly higher interest rates. However, they are essential for high-value home purchases in areas like Oxnard and Thousand Oaks, where the average home listing price commonly exceeds $1m.

Conforming Loan Limits in Ventura County:

For 2025, the standard conforming loan limit in Ventura County is $1,017,750 for a single-family home. Any loan amount exceeding this limit is considered a jumbo loan. Given the high property values in the area, many homebuyers will find themselves needing a jumbo loan to purchase their dream home. Muti-unit loan limits are higher, as seen in the chart below.

VENTURA COUNTY

1-unit

$1,017,750

2-unit

$1,302,900

3-unit

$1,574,900

4-unit

$1,957,250

Low Down Payment Jumbo Financing Options:

Traditionally, jumbo loans required a substantial down payment, often 20% or more. However, new financing options now offer low down payment jumbo loans with as little as 10% or even 5% down, depending on the final loan amount. These options make it easier for homebuyers to enter the market without depleting their savings.

10% Down Payment Jumbo Loans

A 10% down payment on a jumbo loan can significantly lower the barrier to homeownership. Here’s how it works:

Example: For a $1,500,000 home, a 10% down payment would be $150,000.
Loan Amount: You’d be borrowing $1,350,000 which is clearly above the conforming limit and thus considered a jumbo loan.
Benefits: Lower initial cash outlay, quicker access to homeownership.
Considerations: Slightly higher interest rate when compared to putting down 20%. Loans amount are often limited to $2.5m-$3m

5% Down Payment Jumbo Loans

For those looking to minimize their down payment further, qualified buyers also have jumbo financing options with only 5% down:

Example: For a $1,200,000 home, a 5% down payment would be $60,000.
Loan Amount: You’d be borrowing $1,140,000.
Benefits: Even lower initial cash outlay, making homeownership accessible sooner.
Considerations: Higher monthly payments and interest rates, stricter eligibility requirements. Loan amounts are often limited to $2m

Combo Loan Structures to Avoid PMI:

One of the main concerns with low down payment loans is Private Mortgage Insurance (PMI), which can add hundreds to your monthly expenses. However, combo loan structures, such as piggyback loans, can help you avoid PMI.

Piggyback Loans

A piggyback “combo” loan involves taking out two loans simultaneously to avoid PMI:

Primary Loan: Covers 80% of the home’s value.
Secondary Loan (second mortgage or home equity loan): Covers 10% or 15%.
Down Payment: The remaining 10% or 5%.
Example: of 90% financing: 80-10-10 loan structure
Home Price: $1,250,000
Primary Loan (80%): $1,000,000
Secondary Loan (10%): $125,000
Down Payment (10%): $125,000
Benefits:
Avoid PMI: By keeping the primary loan at or below 80% of the home’s value, you avoid the need for PMI.
Lower Interest Rate: This structure will often provide lower interest rates on the primary loan.
Flexibility: You can choose loan terms that best fit your financial situation.
Considerations:
Interest Rates: The secondary loan may have a higher interest rate.
Closing Costs: will be higher with (2) separate mortgages.
Complexity: Managing two loans can be more complex than a single loan.

How to Qualify for a Low Down Payment Jumbo Loan:

Qualifying for a low down payment jumbo mortgage involves meeting several key criteria. Here’s what lenders typically look for:

Credit Score

Minimum Score: A higher credit score is crucial. Aim for at least 680, though some lenders and banks might require a minimum of 720 or higher.

Debt-to-Income Ratio (DTI)

Maximum DTI: Lenders prefer a DTI of 45% or lower, although some may accept up to 50% with strong compensating factors. A lot depends on the final loan amount, and down payment chosen.

Income and Employment

Stable Employment: Steady, verifiable income is essential. Mortgage companies like to see at least two years of continuous employment in the same field.
Income Documentation: Be prepared to provide detailed income documentation, including tax returns, W-2s, and pay stubs.
Self Employed Borrowers: Special options do allow self-employed business owners to qualify based on their actual company bank deposits rather than tax returns. These programs are helpful for business owners that may struggle to document income through traditional means. Learn more about bank statement loans for self-employed buyers here.

Assets and Reserves

Liquid Assets: Demonstrating substantial liquid assets can improve your chances of qualifying.
Reserves: Lenders will likely require payment reserves equivalent to months of mortgage payments. Generally, higher loan amounts exceeding $3m will require greater reserves of 9mo+. Non-liquid assets like IRA or 401K accounts are eligible to satisfy the reserve requirements.

Whether you’re eyeing a luxurious home in the hills or a modern downtown condo, a jumbo loan could be the key to making your dream a reality. Evaluate your financial situation, consider the pros and cons, and contact us today to discuss your jumbo loan options. Please call or just submit the Quick Contact Form here 7 days a week.

Serving all of CA including: Oxnard, Thousand Oaks, Simi Valley, Ventura.