Shopping for a home in San Mateo or the broader Peninsula? If you’re eyeing many single-family homes, there’s a good chance your financing will be a jumbo loan. That can feel complex, especially if you’re relocating or moving up from a starter home. In this guide, you’ll learn what qualifies as a jumbo loan, how it differs from conforming financing, how to strengthen your pre-approval, and how to compete in a fast market. Let’s dive in.
What counts as a jumbo loan
A jumbo loan is any mortgage amount that exceeds the county’s conforming loan limit for the year. Conforming limits are set by the Federal Housing Finance Agency and can change, so you should verify the current limit for San Mateo County on the FHFA conforming loan limits page and confirm with your lender.
Because limits vary by county and year, avoid assuming a fixed threshold. The safest approach is to check the latest FHFA table, then ask your lender whether your target price range and down payment would place your loan above or below the limit.
Jumbo vs. conforming: key differences
Jumbo loans are underwritten by portfolio and non-agency investors. That means guidelines can vary by lender. Here are common differences you should expect.
Credit score and DTI
- Lenders typically require stronger credit for jumbos. Higher minimum FICO scores and clean credit histories are common.
- Debt-to-income limits are often more conservative. Some lenders allow exceptions, but many prefer lower DTIs for larger loans.
Reserves and liquid assets
- Jumbo programs often require more months of cash reserves after closing.
- Reserve requirements can increase with larger loans or multiple properties.
Down payment and LTV
- Many jumbos require higher down payments or lower loan-to-value ratios.
- Some lenders offer higher-LTV options for very strong borrowers, paired with stricter documentation and reserve rules.
Documentation depth
- You’ll provide standard income, asset, and employment documents, but expect deeper review.
- Lenders may request more bank statements, explain large deposits, and ask for additional tax documentation, especially if you’re self-employed.
Appraisals and valuation
- Jumbo underwriting often applies more scrutiny to appraisals.
- In areas with limited comparable sales or unique properties, lenders may require additional appraisal reviews or more comparables.
Rates and pricing
- Jumbo rates do not always price higher than conforming rates. Spreads move with market conditions.
- Pricing depends on loan size, LTV, credit profile, and investor appetite.
Mortgage insurance and overlays
- Conventional PMI is often unavailable for very large loans. Lenders may require higher down payments or offer lender-specific structures.
- Many lenders add overlays like higher minimum FICO scores, lower max DTI, or higher reserves.
Why many San Mateo buyers use jumbos
The Peninsula’s price environment sits well above national medians. Many typical purchase price points, especially for single-family homes, push loan amounts above the conforming limit. That is why jumbo financing is common across San Mateo County.
Low inventory and multiple-offer scenarios also shape how you use financing. Cash offers are frequent, and jumbo underwriting can take longer than small conforming loans. Your strategy should balance speed, certainty, and risk with a plan that fits local competition.
Get pre-approved the right way
A strong pre-approval sets the pace of your search and credibility with sellers.
- Work early with a lender experienced in local jumbos. Experience with Peninsula appraisals and overlays matters.
- Request a written pre-approval that states your maximum loan amount, rate type, reserve requirements, and any lender overlays.
- Match approval to inventory in your target neighborhoods so you account for down payment, closing costs, and required reserves.
Questions to ask lenders
Use this checklist to compare lenders and clarify what it will take to win.
- Are you a portfolio lender, bank, or broker, and who will purchase the loan?
- What is the maximum loan size you’ll approve in this county? Do you price high-balance or jumbo tiers differently?
- What are your minimum FICO, maximum DTI, and required reserves for my scenario?
- What income and asset documentation will you require? For self-employed, which tax years and statements do you need?
- Do you have any overlays beyond investor guidelines? What are they?
- How long do underwriting and clear-to-close typically take for a jumbo loan?
- What appraisal process do you require for higher-value homes in my target area? Do you use appraisal reviews?
- How do your rates compare to conforming programs, and what factors could change my quoted rate?
Choosing the right lender
Look beyond just rate. Consider:
- Proven experience closing jumbos on the Peninsula.
- Willingness to document overlays and reserve requirements in writing.
- Turnaround times for appraisal ordering, underwriting, and closing.
- Program flexibility such as bridge financing, portfolio options, or temporary buydowns.
Smart financing strategies
Jumbo paths are not one-size-fits-all. Discuss options with your lender and agent.
- Increase down payment to drop the loan below the conforming limit if feasible, after confirming the current limit.
- Use a bridge or swing loan if your down payment depends on proceeds from a sale. These can carry higher costs and stricter rules.
- Consider a second lien or HELOC to structure financing, understanding added complexity and potential higher combined costs.
- Prioritize a strong written pre-approval and timely appraisals to help reduce time to close.
Contingencies in competitive offers
In hot Peninsula markets, some buyers shorten or waive appraisal and financing contingencies. That can strengthen an offer, but it raises risk. With jumbos, appraisal shortfalls and tighter underwriting are more likely, so align your contingency strategy with your lender’s timelines and your risk tolerance.
- Discuss contingency options and risks with your agent and lender.
- If you plan to shorten timelines, confirm appraisal ordering and underwriting capacity upfront.
Appraisal prep for unique homes
High price points and varied neighborhoods can limit recent comparable sales. Lenders may request broader comps or additional reviews.
- Set expectations early about how valuation will be approached.
- Share relevant property details with your lender and agent so the appraisal order includes accurate context.
- If the home is unique, plan extra time for any appraisal reviews the lender may require.
Timeline and communication plan
The smoothest jumbo closings rely on proactive communication and a realistic schedule.
- Week 0–1: Choose a lender experienced in local jumbos and secure a written pre-approval with stated overlays and reserves.
- Week 1–2: Align approval amount to target inventory and confirm funds for down payment, closing costs, and reserves.
- Offer stage: Coordinate with your agent on contingencies and timelines that match lender capacity. Confirm how fast the appraisal can be ordered.
- Under contract: Keep your lender and agent updated on documentation and any property details that could affect underwriting.
Next steps
If you expect to need a jumbo loan for a San Mateo purchase, start lender conversations early and tailor your pre-approval to local inventory. You will compete best when you pair the right financing structure with a clear appraisal plan and a realistic timeline.
If you want lender-aware guidance and a smoother path from offer to close, reach out to James Kil for a quick strategy call. James combines a mortgage underwriting background with hands-on Peninsula experience so you can buy with confidence.
FAQs
What is a jumbo loan in San Mateo?
- It’s a mortgage that exceeds the county’s current conforming loan limit for the year, as published by the FHFA and confirmed by your lender.
Do jumbo loans always have higher rates?
- Not always; jumbo rates can be higher or lower than conforming depending on market conditions, loan size, LTV, credit, and investor pricing.
How long does jumbo underwriting take?
- Timelines vary; jumbos often take longer due to deeper documentation and appraisal review, so plan for extra time with your lender.
Can you get PMI on a jumbo loan?
- PMI options are limited for very large loans; most jumbo programs rely on higher down payments or lender-specific solutions.
How much in reserves do I need for a jumbo?
- Reserve requirements vary by lender and profile, but jumbos commonly require more months of liquid reserves than conforming loans.
What is a lender overlay on jumbos?
- It’s a lender rule that is stricter than investor guidelines, often affecting minimum FICO, maximum DTI, required reserves, or documentation.
How do appraisals work for high-priced homes?
- Lenders may require enhanced appraisal work, broader comps, or additional reviews when recent comparable sales are limited or the property is unique.
