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How Loan Amounts Affect Rates

Several factors determine your rate such as; credit score, down payment, type of property, type of loan, type of occupancy, loan amount and county you live in or are looking to purchase. In this blog, I will just concentrate on the loan amounts as they relate to rates.

There are basically two categories of loans that will determine your rate and loan program:

Conforming Loan: Loan amounts not exceeding $510,400 for Single Family Residence.

High Balance Loan: Loan amounts greater than $510,400, not exceeding $765,600 for Single Family Residence.

A loan amount exceeding $765,600 for Single Family Residence is called a Jumbo loan which is a totally different category and has its own sets of rules.

There are 4 types of properties for residential loans - SFR, 2 Units, 3 Units, and 4 Units. The amount of loan limit is increased according to the number of units. Below is a table of the 2020 Loan Limits for LA and Orange Counties:

Property Type Conforming High Balance
SFR                510,400                  765.600
2 Units                653,550                  980,325
3 Units                789,950               1,184,925
4 Units                981,700               1,473,550

These loan limits apply to Conventional, FHA and VA loans. So when rate shopping, remember Conforming Loan Rates and Pricing are lower than High Balance Loan Rates and Pricing.

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Jonathan Caguioa

NMLS# 250609 / DRE# 01137630 Mobile: 949-241-2527

ALLIANZE MORTGAGE NMLS# 346138 / DRE# 01403147

15820 Whittier Blvd, Suite G
Whittier, CA 90603

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