Did you know that conventional loan limits went up to $510,400 in 2020? This means that so long as your loan amount is at or below that number, you are eligible for home financing according to the guidelines set by the agencies (this requires proper qualifications be met and approval issued by your lender). Any loan amount greater than $510,400 requires a jumbo loan.

A jumbo loan, simply put, requires a bit more hoop jumping than conventional loans. It may require a larger down payment, a more significant asset base, a lower debt-to-income ratio, stricter credit requirements, etc. There are often more guidelines and more stipulations, which makes sense when you think about how much money you are being entrusted with!

Then there’s the FHA (government insured financing) increase for 2020.  In Jackson County, Oregon, the FHA loan limit increased to $333,500. Keep in mind that there is a 3.5% minimum down payment requirement for this loan program.

With all of this said, you may not know what the best option is for you.  One of the biggest mistakes people make when considering purchasing a home, is not taking the time to get fully pre-approved.  You have worked hard to get to the place of fulfilling this dream of homeownership, so it only makes sense to connect with a trusted loan officer who can help map out your options. Here’s some talking points to have with them.

  • Does it make the most sense for you to buy your first home with 3% down once you know you’ll be taking on a slightly higher interest rate and pay a little more in mortgage insurance?
  • Does it make sense for you to get jumbo financing, or should you put a little more money down to make sure you stay within the conforming loan limits?
  • When is an FHA loan the best option? Is it only for people with low-moderate credit?

Your lender would be able to help you explore how 5% down compares to 3% and show you how that affects your monthly payment. Whatever the scenario may be, it’s important to know your options, which is why I highly recommend connecting with a reputable lender who is willing to take the time to help you make a decision that aligns with your goals.

Please let me know if you have any questions.  I am always here to help!