Shopping for a Los Altos home and hearing the term “jumbo loan” everywhere? You are not alone. In this market, many buyers need financing that sits above standard limits, and the rules can feel different from a typical mortgage. You want clarity, confidence, and a plan that helps your offer stand out.
In this guide, you will learn what jumbo loans are, how they work in Los Altos and Santa Clara County, what lenders expect, and how to use pre-approval to strengthen your offer. You will also get a practical checklist to take into lender meetings. Let’s dive in.
What is a jumbo loan
A jumbo mortgage is a loan amount that exceeds the current conforming loan limit set by the Federal Housing Finance Agency. Because these loans cannot be purchased by Fannie Mae or Freddie Mac, they are funded by private investors or kept in a lender’s portfolio.
In Los Altos and nearby luxury submarkets, single-family home prices are commonly in the multi-million range. That means many purchases require jumbo financing. You will see more lender-to-lender variation, and you should expect a closer look at income, assets, and reserves.
Jumbo vs. conforming loans
- Investor and risk: Conforming loans can be sold to Fannie or Freddie. Jumbo loans stay with the lender or go to private investors, so guidelines vary more.
- Borrower standards: Jumbo loans often expect higher credit scores, larger reserves, lower debt-to-income ratios, and sometimes larger down payments.
- Interest rates: Jumbo rates have not always been higher. Depending on your profile, loan size, and whether you choose a fixed or ARM product, jumbo pricing can be similar to conforming.
Typical requirements in Los Altos
Los Altos buyers should plan for stronger documentation and financial depth. Expect conversations about the following.
Credit score basics
Many lenders prefer scores in the 720 to 740 range or higher for standard jumbo products. Some programs accept scores in the high 600s with strong compensating factors, though pricing and terms are usually less favorable.
Down payment and LTV
Common jumbo programs ask for 10 to 20 percent down, with maximum loan-to-value ratios up to 80 percent. For larger loan amounts or higher risk profiles, lenders may require 20 to 30 percent down. At very high price points, many lenders cap maximum LTV at 70 to 80 percent.
Debt-to-income targets
Many jumbo lenders prefer a DTI of 43 to 45 percent or lower. If you have strong reserves, excellent credit, or a relatively small payment compared to your income, some lenders may allow a higher DTI.
Cash reserves
Plan for 6 to 12 months of reserves as a common expectation. This is the number of months of full housing payments that you can cover from liquid or verifiable assets after closing. Larger loans, second homes, or investment properties may require more.
Income documentation
- W-2 salaried: Two years of W-2s, two years of tax returns, recent paystubs, and employer verification.
- Self-employed or 1099: Two years of personal and business tax returns, a year-to-date profit and loss statement, and possibly 1099s. Some lenders offer bank-statement or asset-depletion programs.
- Alternative programs: Portfolio or non-QM lenders sometimes support bank-statement or asset-based qualification. Expect more documentation and case-by-case underwriting.
Assets, RSUs, and liquidity
Lenders verify bank statements, retirement and investment accounts, and proof of funds for closing. If you rely on stock or RSUs, expect to show vesting schedules, evidence of liquidity, and the plan to convert stock into cash if needed. Lenders may discount restricted shares.
Employment history
Stable employment or industry continuity helps. Executives and founders may be asked for two years of consistent income or CPA documentation to explain compensation structures.
Appraisal and property
High-value homes require experienced local appraisers and strong comparable sales. Unique properties can take longer to appraise or require multiple valuation approaches. Build appraisal timing into your offer strategy.
Occupancy and property type
Primary residences receive the most favorable terms. Second homes and investment properties often require larger down payments, more reserves, and higher rates.
Rates and lock policies
Ask each lender about rate lock options, float-downs, and how discount points affect your payment and break-even. Pricing can shift with loan size, credit, and LTV, so request side-by-side scenarios.
Local factors to consider
Price environment
Los Altos is one of the highest-priced markets in Santa Clara County. Many buyers choose jumbo financing simply because most single-family homes exceed conforming limits.
Property taxes and costs
California’s base property tax is about 1 percent of assessed value, plus local assessments. Effective rates in Santa Clara County usually run slightly higher than 1 percent. HOA dues, if applicable, also factor into your qualifying numbers and reserve requirements.
Inventory and offer dynamics
In competitive Silicon Valley markets, sellers favor buyers who show clear proof of funds and financing. A thorough jumbo pre-approval, ideally fully underwritten, can set your offer apart.
The power of pre-approval
Pre-qualification vs. pre-approval vs. pre-underwriting
- Pre-qualification: An estimate based on information you provide. Helpful for early planning, but light in seller confidence.
- Pre-approval: Credit, income, and assets are reviewed. You get a conditional commitment for a program and amount, which carries more weight.
- Fully underwritten approval: Some lenders underwrite upfront and approve you subject only to property and title. This is strongest in multiple-offer situations.
Why sellers care
In a high-price market with short escrows, sellers and listing agents scrutinize financing. A lender who routinely closes jumbos in Santa Clara County gives confidence about appraisal timing, reserve verification, and the ability to fund on schedule.
Practical offer advantages
- Faster appraisal expectations from local-savvy lenders.
- Higher seller confidence when reserves and source of funds are documented.
- Clear timeline and rate-lock strategy that keeps the deal together if rates move.
Is a jumbo likely for this home
Ask yourself a few quick questions:
- Is the home price above current conforming limits? If yes, you will likely need a jumbo.
- Is the property a unique or luxury home that might be harder to appraise? If yes, plan extra time and documentation.
- Do you rely on RSUs or stock sales for your down payment or reserves? If yes, choose a lender familiar with tech compensation.
If your answers point to jumbo financing, speak with at least two lenders, including a local option that understands Los Altos appraisals and timelines.
Smart lender shopping tips
- Compare at least two jumbo quotes. Request a fixed-rate and an ARM option so you can see payment and rate differences.
- Ask for rate sheets that show how pricing changes with credit score, LTV, and discount points. Run break-even math on any points.
- Clarify reserve rules for your exact loan size and occupancy. Requirements can jump at higher loan tiers.
- If you are self-employed or heavy on RSUs, confirm documentation and how the lender will treat your income and stock.
- For move-up buyers, discuss bridge financing and how it pairs with your jumbo.
Lender conversation checklist
Bring this list into your first call.
Basic borrower profile
- Current credit score.
- Monthly debt payments for student loans, auto, and credit cards.
- Employment status and history.
Property details
- Target neighborhood in Los Altos or nearby.
- Purchase price or price range.
- Intended occupancy: primary, second home, or investment.
Loan program questions
- Will this be a jumbo loan over the current conforming limit?
- What fixed, ARM, portfolio, non-QM, or bank-statement options fit my profile?
- What are the estimated rate and APR today, and how could pricing change with LTV or credit score?
- How do discount points affect my payment and break-even timeline?
Qualification and documentation
- Minimum credit score, maximum LTV, and acceptable DTI for my scenario.
- How many months of reserves do you require for this loan size and occupancy?
- Exact documents needed for income, assets, and source of funds.
- For RSUs or self-employed income, how do you underwrite it and what proof do you need?
Timeline and logistics
- Typical time to pre-approval and to close once in contract.
- Appraisal process for high-value homes and expected turn time.
- Rate-lock policies, fees, and any float-down options.
Fees and costs
- Lender fees and expected third-party costs such as appraisal, title, and escrow.
Underwriting strength
- Do you offer fully underwritten pre-approvals that sellers accept?
- If I am also selling, what bridge options do you recommend and how do they affect qualification?
Experience and next steps
- Recent jumbo closings in Los Altos or Santa Clara County and references.
- Documents to upload first to speed approval.
- A written pre-approval or conditional commitment that states loan type, amount, lock options, and conditions.
Common Silicon Valley scenarios
RSU-heavy buyer
You have strong income and a large RSU grant. A lender familiar with tech compensation can review vesting schedules and liquidity. Expect them to document how you will cover down payment and reserves if shares have not vested.
Founder or self-employed buyer
You run a company or work on 1099 income. Lenders will ask for two years of personal and business tax returns, and may request a year-to-date profit and loss statement. A portfolio or bank-statement program could be a fit if standard underwriting does not capture your true cash flow.
Move-up buyer needing a bridge
You want to buy in Los Altos before selling your current home. Some lenders offer bridge solutions that let you access equity to strengthen your jumbo purchase. Clarify how this affects your DTI, reserves, and rate-lock plan.
Next steps to move forward
- Get organized: Pull credit, gather paystubs, W-2s or tax returns, bank and investment statements, and RSU documentation.
- Talk with two lenders: Include a local lender familiar with Los Altos appraisals and timelines.
- Secure strong pre-approval: Fully underwritten if possible to compete in multiple-offer situations.
- Align your offer strategy: Coordinate appraisal timing, rate-lock terms, and contingency plans so your offer is both attractive and realistic.
If you want a clear plan and lender introductions that fit your profile, reach out to Vincent Choi. With deep local experience, finance fluency, and multilingual support in English, Mandarin, Cantonese, and Vietnamese, you will get guidance that helps you move with confidence.
FAQs
What is a jumbo loan in Los Altos
- A jumbo loan is any mortgage amount above the current conforming loan limit, which is common for Los Altos homes that are often priced in the multi-million range.
How much down payment is typical for jumbos
- Many programs expect 10 to 20 percent down, with larger loans or non-owner-occupied properties often requiring higher down payments.
What credit score do jumbo lenders want
- Many lenders look for 720 to 740 or higher, though some programs accept lower scores with strong compensating factors.
How many months of reserves will I need
- Plan for 6 to 12 months of mortgage payments in reserves, with higher amounts possible for larger loans or second homes.
Are jumbo mortgage rates much higher
- Not always. Depending on your profile, loan size, and product type, jumbo rates can be close to conforming rates.
Do lenders work with RSUs or self-employed income
- Yes. Portfolio and non-QM lenders often offer bank-statement, asset-depletion, or RSU-accommodating programs with specialized documentation.
How long does a jumbo closing take
- Timelines are similar to conventional loans once documents are complete, but high-value appraisals can add time. Local lender experience can help keep the schedule on track.
