Shopping for a home in Los Altos Hills and wondering if your loan will be considered jumbo? You are not alone. Many properties here sit above standard lending limits, which changes how you qualify, how your loan is priced, and how the process unfolds. In this guide, you will learn what counts as a jumbo loan in 2024, how it differs from conforming financing, what drives rates and costs, and how to prepare a strong, low‑stress file tailored to Los Altos Hills. Let’s dive in.
What counts as a jumbo loan in 2024
A jumbo mortgage is any first loan that exceeds your county’s conforming limit set by the Federal Housing Finance Agency. High‑cost areas have higher limits than the national baseline. Santa Clara County is one of those high‑cost areas.
Any loan amount above the county limit is a jumbo and is financed on the private or portfolio market. Because typical sale prices in Los Altos Hills are often above high‑cost limits, most buyers will use a jumbo or another non‑conforming solution.
How jumbo loans differ from conforming
Jumbo loans follow stricter rules and documentation than standard conforming or high‑balance loans. Expect tighter credit, more reserves, and detailed asset verification.
Borrower basics lenders look for
- Credit score: Many lenders price best at mid‑700s and above. Lower scores may be possible with tradeoffs.
- Down payment: 20 percent down is a common benchmark. Some portfolio lenders allow 10 to 15 percent for well‑qualified buyers.
- Cash reserves: Plan for 6 to 12 months of PITI in liquid reserves, sometimes more for very large loans or second homes.
- Debt‑to‑income: Many lenders target 43 percent or lower, with flexibility for substantial assets.
Income and documentation standards
- Full documentation: 2 years of tax returns, W‑2s, recent paystubs, and 60 to 120 days of bank and investment statements.
- Tech compensation: Lenders vary on RSUs and options. Many count only vested, sellable RSUs, often averaged over 2 years, and will review vesting schedules and sale history. Some treat RSUs as assets for reserves or down payment rather than ongoing income.
- Self‑employed: Expect 2 years of personal and business returns. Some lenders accept year‑to‑date P&L and accountant letters. Non‑QM options add flexibility at higher rates and fees.
- Gifts and large deposits: Source and paper‑trail requirements are strict. Gift letters and minimum borrower contributions are common.
Mortgage insurance
Private mortgage insurance is uncommon for jumbos. Lenders generally rely on your equity and reserves instead of PMI.
Appraisals and valuation in Los Altos Hills
Appraisals on custom or hillside properties can be complex. There are often fewer recent, nearby comparable sales.
- Most lenders require a full interior and exterior appraisal. Some will expand the radius or allow a longer lookback for suitable comps.
- Certain cases may need a second valuation or a broker opinion. Specialty properties can add time and cost.
- If the appraisal lands below the contract price, you may need a larger down payment or a price discussion with the seller.
Rates and costs: what really drives pricing
Jumbo rates move with market conditions and often price at a spread to conforming loans. The spread changes by lender, borrower profile, and liquidity in the market.
- Main rate drivers: loan size, LTV, credit score, DTI, documentation type, occupancy, loan purpose, and term.
- Fixed vs ARM: 30‑year fixed can price higher than some conforming loans. ARMs may offer lower initial rates but add future rate risk.
- Closing costs: Expect origination, underwriting, appraisal, title, escrow, and possible broker fees. High‑value appraisals and specialty reports, such as geotechnical, septic, or surveys, can add hundreds to thousands of dollars.
- Discount points: You can often buy down the rate with points. Pricing varies by lender and profile.
Local property factors that affect financing
Los Altos Hills properties often include large lots, custom builds, and hillside sites. These features can trigger extra lender review.
- Utilities and access: Private roads, shared driveways, wells, or septic systems require documentation of legal access, maintenance agreements, and system condition.
- Environmental and geological: Hillside or seismic areas may prompt geotechnical or site stability reports and specific insurance requirements.
- Equestrian or agricultural elements: Barns and outbuildings are appraised separately and may affect value and coverage.
Taxes, permits, and insurance basics
Understanding local requirements early helps you plan your cash needs and timelines.
- Property taxes: Under California’s Proposition 13, the base tax is roughly 1 percent of assessed value, plus local assessments. High‑value sales can generate notable supplemental assessments.
- Permits and unpermitted work: Older estates may include unpermitted additions. Lenders can require corrections or escrow holdbacks for significant items.
- HOA and CC&Rs: Some neighborhoods have architectural controls. Review them early to avoid surprises that affect valuation or insurability.
- Insurance: High‑value homes can have higher premiums. Lenders typically require adequate hazard coverage and may ask about earthquake, flood, or wildfire exposure based on location.
Preapproval playbook for Los Altos Hills buyers
Get fully prepared before you write an offer. A complete file and a lender with jumbo experience can save you time and stress.
- Choose lenders with local jumbo expertise, including portfolio or private bank options.
- Gather documents: 2 years of tax returns, W‑2s, recent paystubs, 60 to 120 days of asset statements, RSU award and vesting schedules, gift letters if needed, and entity or trust documents.
- Request a full‑underwrite preapproval, not a soft review. This can reduce contingencies and strengthen your offer.
- Align on appraisal expectations and confirm your lender uses appraisers who know Los Altos Hills estate properties.
- Confirm reserve requirements and build a buffer for taxes, insurance, and potential property remediation.
Timeline from offer to close
Jumbo financing moves at the speed of your documentation and the property’s complexity.
- Preapproval: about 3 to 10 business days once you submit a complete file.
- Appraisal and inspections: plan for 10 to 21 days, longer if geotechnical or environmental reports are needed.
- Underwriting to clear to close: typically 7 to 21 days after the appraisal is in.
- Total close: 30 to 45 days is common. For complex properties, allow 45 to 60 or more.
Financing alternatives if you want flexibility
Different paths can reduce rate, improve speed, or tailor to your income profile.
- High‑balance conforming: If your loan fits Santa Clara County’s high‑balance limit, you may see better pricing than a jumbo.
- Portfolio loans: Banks that keep loans on their balance sheet can be flexible on LTV, documentation, or income seasoning, especially with strong banking relationships.
- Non‑QM: Useful for complex income like 1099 or significant RSUs. Expect higher rates and fees for flexibility.
- Bridge loans: Short‑term funds that let you buy before you sell. Often interest‑only and more expensive, but effective in competitive situations.
- HELOC or second lien: Tap equity in another property to reduce your first mortgage size.
- All‑cash: Common at the high end. You can refinance later, but weigh liquidity and tax implications.
Pro tips for tech professionals using RSUs
- Start early: Collect award letters, vesting schedules, and a 2‑year history of sales and tax withholdings.
- Clarify treatment: Ask each lender whether vested RSUs count as income or as assets for reserves.
- Plan taxes: Show how you will cover tax obligations from vesting and sales.
- Document liquidity: Provide brokerage statements that show vested, sellable shares and any planned liquidation.
Make your offer stand out
- Lead with a fully underwritten preapproval and a clear proof of funds package.
- Discuss appraisal strategy up front, including recent comps and how you will address a low valuation if it occurs.
- Right‑size contingencies to the property. Build time for specialty inspections common to hillside or estate homes.
- Keep a liquidity cushion beyond lender minimums for taxes, insurance, and initial improvements.
Ready to map the financing path that fits your goals and the realities of Los Altos Hills? Reach out to Vicki Ferrando for local guidance, offer strategy, and a coordinated plan that aligns your lender, inspections, and timing.
FAQs
How much down is typical for a jumbo in Los Altos Hills?
- Many buyers put 20 percent down, with some portfolio programs allowing 10 to 15 percent for strong borrowers.
Will lenders count my RSUs as income on a jumbo loan?
- Often only vested and sellable RSUs count, typically averaged over time, with full documentation of vesting and sale history.
How many months of reserves do jumbo lenders want?
- Plan for 6 to 12 months of PITI, and more for very large loans or second homes.
Are jumbo mortgage rates much higher than conforming rates?
- They can be slightly higher, but pricing varies by market conditions and lender. Prime borrowers often see competitive offers.
What extra inspections are common for hillside or estate homes in Los Altos Hills?
- Geotechnical or soil reports, septic and well inspections, and documentation for private roads and access are common requests.
Can I purchase in the name of a trust or LLC with a jumbo loan?
- Many lenders allow trusts or certain entities, but they require extra documentation and may need personal guarantees with aligned title and insurance.
