When searching to purchase a home, mortgage loans can be a viable option to see that goal come to fruition. Understanding the difference between loans can be beneficial to knowing which loan to apply for.
High Balance Mortgage Loans and Jumbo Loans are two loans that are typically sought after in high value places of living. If you live in Los Angeles, you know better than most how expensive the housing market is. Chances are that when looking to purchase a home, one of those loans you will apply for.
Mortgage loans can be complicated to grasp, but here at Midgate Mortgage our team of professionals can guide you in the right direction. Give us a call at 310-791-0854 to speak with one of our experts. Or you can reach out to us on our Contact Page.
Continue reading below to learn about the similarities and differences between High Balance Mortgage Loans and Jumbo Loans.
The Similarities
Although the two loans have more differences than similarities, there are still more than a couple that stand out:
- Both High Balance Mortgage Loans and Jumbo Loans are for properties that are considered to be above average in the housing market. They are used for homes that are expensive to buy as both loans grant more than $500,000.
- Interest rates vary depending on numerous competitive factors.
- Both mortgage loans generally only get accepted if the individual applying for them has a credit score of 620+
The Differences
The differences are a bit technical and intricate, but it is still a good idea to have an understanding of what they are:
- Jumbo Loans can be issued anywhere in the country.
- High Balance Mortgage Loans are available only in counties the Federal Housing Finance Agency (FHFA) designates as “high cost.” High Balance Mortgage Loans can be issued in amounts that fall between the local limit ($647,200 in 2022) and the national high-cost limit, which is $970,800 in 2022. High-cost areas happen to be found in 18 states and the District of Columbia.
- High Balance Mortgage Loans are considered conforming loans by the FHFA, which means Fannie Mae and Freddie Mac can guarantee them.
- Jumbo loans are non-conforming and ineligible for purchase by Fannie and Freddie.
- Since High Balance Mortgage Loans are “conforming” they need to stick to the FHFA guidelines.
- Jumbo Loans are non-conforming, so lenders are free to set their own eligibility requirements.
Leave It to the Experts
Loans are extremely complicated as there are many rules and requirements that must be strictly followed. Leave it to the experts at Midgate Mortgage to get you the exact loan you need. Call us at 310-791-0854 visit our Contact Page to fill out a quick form.
