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A jumbo loan is a type of mortgage that is made in an amount over the conventional conforming loan limit in a specific location.
In Seattle, home prices are higher than the average location in Washington state, so loan limits tend to be higher.
According to a recent report by the Mortgage Bankers Association (MBA), access to jumbo mortgage loan financing has increased in 2021. In and around Seattle, jumbo loans have become an increasingly popular financing method due to steadily rising home values.
According to Zillow, the median home value in Seattle, Washington was around $804,504 as of January 2021. That’s quite a bit higher than where it was just last year. House values in the area are expected to continue climbing even more in 2021.
As a result of this trend, more and more Seattle home buyers are using jumbo loans to finance their purchases. That’s not surprising when you consider that the median home value in the area is now higher than the conforming loan limit for King County.
Definition: A jumbo loan is basically a non-conforming mortgage loan that’s too big to be sold to Fannie Mae and Freddie Mac. It exceeds the conforming limit for the county where the home is being purchased.
While jumbo loans often have lower mortgage rates than conforming, they can also have stricter qualification criteria due to the larger amount being borrowed.
According to a recent industry report, jumbo loan access has increased in Seattle and elsewhere across the country. This report comes to form the Mortgage Bankers Association (MBA), an industry group that also tracks home loan trends across the country.
One of the reasons jumbo loans are in such demand across the Seattle area is that homes have become more expensive. Prices across the metro area have risen steadily over the last few years.
As a result, Seattle, Bellevue, and Sammamish have become three of the priciest cities in the state of Washington. (The median home values for Bellevue and Sammamish are even higher than Seattle’s. Both are around the $1 million mark.)
So it’s only logical to see more home buyers seeking jumbo loans in Seattle, and in other relatively high-priced housing markets across the country.
Right now, the conforming loan limit in King County is $776,250, for instance, while the average home price in Seattle is currently $804,504. As you can see, it’s easy to go over the conforming loan limit threshold and therefore end up in jumbo loan territory.
Sammamish Mortgage is a local, family-owned company that has been serving borrowers across Washington since 1992, as well as those in Oregon, Colorado, and Idaho. Our mortgage financing professionals can work with you to help you determine which one of our mortgage programs is right for you. Please contact us if you have mortgage-related questions, or if you’d like to receive a rate quote.
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