When a jumbo mortgage balance can move into a conforming refinance
Paying down to qualify
Crossover answer
If the balance is just over the limit, you can bring cash to closing so the new loan fits, or make a principal payment first. Compare that cash with what you would save, and keep enough in reserves. Using cash this way is not a cash-out refinance; it is a rate-and-term refinance with a smaller new loan.
Last reviewed against the primary sources listed below.
Weigh it
- How large is the gap?
- What would that cash earn elsewhere?
- Would you still meet reserve requirements?
Switching questions
Can I pay down my loan at closing to make it conforming?
Yes. Bringing cash to closing reduces the new loan amount.