Posted: 08/02/2018

A new report shows that the median price for a single-family home in the Bay Area hit a record $935,000 this quarter.

According to CoreLogic, home sales are up 12 percent in the Bay Area and more homes were sold in the Bay Area in May 2018 than in any May since 2013. Experts suggest that the reason for this upward trend in sales is increasing inventory, which could suggest that the home shortage that has driven up prices may be abating.

Now may be the time to get a great home in the Bay Area with a jumbo loan. A jumbo loan will cover anything that exceeds a county’s conforming loan limit, which varies from county to county. In most U.S. counties, the conforming loan limit is $417,000; a mortgage exceeding that limit is a jumbo loan. In some areas, like the San Francisco Bay Area, the conforming loan limit varies by county and can range from $453,100 to $679,500 due to being located in a high-cost area.

A jumbo loan will cover the full amount needed for the purchase or refinance of your home. Interest rates for a jumbo mortgage tend to be slightly higher than those for a conforming loan, depending on market conditions. These loans are available in both fixed- and adjustable-rate terms. Fixed options include 30, 20, and 15-year terms. Adjustable rate options include a fixed period of 5, 7, or 10 years that roll to annual adjustable.

One option for Bay Area buyers is to get a first and second mortgage with the second mortgage covering the loan balance that goes above the conforming limit. Essentially, splitting up the loan total between two mortgages creates a situation where you are coming [...]