Jumbo Loans In The Bay Area: What Buyers Should Know

Shopping for a home in Burlingame and seeing prices from $1.2M to $2M? A small shift in your down payment could change your loan type and your interest rate. If you understand where the jumbo line starts and what lenders expect, you can plan with confidence and write stronger offers. In this guide, you’ll learn how jumbo loans work in San Mateo County, what the 2024 limits mean for you, how rates and underwriting differ, and the steps to take before you tour. Let’s dive in.

Jumbo vs. conforming basics

A conforming loan meets Fannie Mae and Freddie Mac rules, including size limits, so lenders can sell it into the GSE market. This usually lowers funding costs and keeps guidelines consistent. A jumbo loan is any mortgage above the local conforming loan limit and is priced and underwritten by the lender without GSE backing.

For 2024, the conforming loan limit in high‑cost counties like San Mateo is $1,149,825 for a one‑unit property. Any single‑family loan amount above that is jumbo. Limits update yearly, so verify the current FHFA limit when you start your search.

Where the jumbo line falls

Whether your loan is conforming or jumbo depends on your purchase price and down payment. Your loan amount is the price minus your down payment. If that number is higher than the current limit, it becomes jumbo.

Here are useful thresholds using the 2024 limit of $1,149,825:

• With 20% down, the jumbo line hits at a purchase price around $1,437,000.
• With 10% down, the line hits near $1,278,000.
• With 5% down, the line hits around $1,210,000.

Quick examples:

• Buy at $1,000,000 with 20% down → $800,000 loan → conforming.
• Buy at $1,300,000 with 20% down → $1,040,000 loan → conforming.
• Buy at $1,300,000 with 10% down → about $1,170,000 loan → jumbo.
• Buy at $1,800,000 with 20% down → $1,440,000 loan → jumbo.

The takeaway for Burlingame buyers: many homes near $1.0M to $1.4M can be financed with conforming loans if you put down 10% to 20%. Above roughly $1.44M with 20% down, you’ll likely need a jumbo loan under 2024 limits.

What jumbo underwriting expects

Jumbo loans are portfolio or non‑agency products, so lenders set their own rules. Requirements vary by lender, but here’s what you can typically expect.

Down payments and LTV

Conforming loans can allow down payments in the 3% to 5% range for qualified buyers. You can avoid PMI at 20% down. Jumbo programs often expect 10% to 20% down on a primary residence, and 20% down is common for the best pricing. Some lenders offer 90% to 95% LTV jumbos for very strong borrowers, but rates are usually higher and documentation is stricter.

Credit score and DTI

Conforming loans can be available with minimum scores around 620, while best pricing often starts at 740+. Jumbo lenders usually want higher scores, commonly 700 to 740+ for competitive rates. Debt‑to‑income ratios are often tighter for jumbos, with many lenders aiming below 40% even if 43% is a conventional threshold.

Cash reserves and documentation

Conforming loans might require 2 to 6 months of reserves depending on your file. Jumbo loans typically ask for larger reserves, often 6 to 12 months of PITI for a primary home. Expect more documentation: tax returns, W‑2s or 1099s, multiple months of bank and retirement statements, proof of the source of large deposits, and clear documentation of any gifted funds.

Mortgage insurance and property types

Conforming loans use private mortgage insurance when LTV is over 80%, with options to remove it when your equity improves. Jumbo programs often avoid traditional PMI by requiring larger down payments, or they price high‑LTV options with higher rates or lender‑specific insurance. Condos, second homes, and investment properties can face tighter jumbo rules and higher reserve or down payment needs.

Rates and fees for jumbos

Conforming loans benefit from the GSE market, which generally lowers funding costs. Jumbos are either held on bank balance sheets or sold into the non‑agency market. That means pricing depends on investor demand, bank strategy, and market conditions.

• Rate differences shift over time. In some periods, jumbo rates run a bit higher than conforming. In other periods, they are similar or even slightly lower. Your credit score, LTV, reserves, and occupancy can influence pricing more than the label itself.
• Loan features matter. Fifteen‑year fixed and adjustable‑rate mortgages often price lower than 30‑year fixed, but ARMs carry future rate risk. Review the full terms, not just the start rate.
• Fees can be higher. Jumbo loans may carry larger origination or processing fees, and appraisals in high‑cost markets can be more expensive or require additional comparables. Always compare the full APR and costs across lenders.

Practical tip: shop multiple sources, including local banks, credit unions, and mortgage brokers. In Burlingame, local lenders that understand San Mateo County comps and appraisal patterns can add certainty in escrow.

Smart prep before tours

Get a real pre‑approval

A pre‑qualification is a quick estimate. A true pre‑approval verifies income, assets, and credit, and confirms a specific loan type and amount. For buyers near the jumbo line, a detailed pre‑approval helps prevent last‑minute surprises and strengthens your offer.

Documents to gather

• Two years of personal tax returns and W‑2s or 1099s
• Recent pay stubs and employer contact information
• Two to three months of bank and retirement account statements
• Investment account statements and documentation of liquid reserves
• List of monthly debts and any support obligations if applicable
• Gift letters if using gifted funds for your down payment
• Explanations and source documents for any large deposits

Right‑size your down payment

If you want to stay under the conforming limit, multiply the purchase price by your planned LTV to confirm the loan amount. If that number is close to the limit, consider a slightly larger down payment, a price adjustment, or a structure that keeps you within conforming. Small changes can save time and lower underwriting friction.

Move‑up buyer strategies

If you need to sell to buy, you can consider a contingent offer, a bridge loan, a temporary second mortgage, or a home‑equity line. These tools can help you unlock equity but may increase monthly costs and reserve requirements. Ask lenders to model both sell‑first and buy‑first scenarios.

Appraisals and contingencies in Burlingame

Unique or high‑price homes can challenge appraisals due to limited comparable sales. If you are using jumbo financing, consider an appraisal contingency or a down payment cushion in case the appraisal comes in low. Choose lenders who understand San Mateo County sub‑markets and have a clear appraisal process.

Compare lenders beyond the rate

Speed, certainty, reserves, and appraisal strategy matter as much as the headline rate. In competitive situations, a strong pre‑approval letter from a reputable local lender can give sellers more confidence that you will close on time.

Local context in Burlingame

Burlingame is a higher‑priced city in San Mateo County where homes range widely. Smaller condos and cottage properties can land near the lower end of the $1M band. Many single‑family homes near parks, transit, or downtown often trade from the mid‑$1M range into $3M and above depending on lot size and condition.

For property taxes, California’s Prop 13 sets a base rate close to 1% of assessed value, plus local assessments. In San Mateo County, total effective rates commonly fall around 1.1% to 1.3%. Your assessed value is generally set at purchase and can rise up to 2% annually unless ownership changes.

Sample buyer scenarios

• First‑time buyer at $1,200,000 with 10% down: Loan about $1,080,000. This stays conforming under 2024 limits and may qualify for mortgage insurance options if under 20% down.
• Move‑up buyer at $1,300,000 with 10% down: Loan about $1,170,000. This crosses the 2024 limit and becomes jumbo, which likely requires tighter DTI, higher reserves, and more documentation.
• Family buyer at $1,800,000 with 20% down: Loan about $1,440,000. This is a jumbo loan. Strong credit, ample reserves, and a clean appraisal will be key for smooth closing.

These are illustrations. Verify the current conforming limit before you rely on threshold math when you start writing offers.

Key risks and fixes

• Risk: Your loan shifts from conforming to jumbo after appraisal. Fix: Build a buffer in your down payment and keep an appraisal contingency or negotiation plan.
• Risk: Jumbo reserve needs delay closing. Fix: Confirm required reserves early and document assets before touring.
• Risk: Jumbo pricing or fees change during escrow. Fix: Lock your rate strategically and compare full APR across lenders.
• Risk: Documentation slows underwriting. Fix: Gather tax returns, statements, and gift letters up front.

Next steps

If you are shopping in Burlingame, the line between conforming and jumbo can shape your rate, fees, and approval timeline. With the right plan, you can stay competitive and avoid surprises. If you want a local strategy tailored to your budget, timing, and target neighborhoods, let’s talk. Schedule a quick planning call with Daniel Choi to get started.

FAQs

What is a jumbo loan in Burlingame for 2024?

• Any one‑unit mortgage amount over $1,149,825 in San Mateo County is considered jumbo under 2024 limits; always verify the current year’s limit.

How much down do I need for a jumbo loan?

• Many jumbo programs expect 10% to 20% down for primary homes, with 20% common for the best pricing; higher LTV options exist but often carry stricter terms.

Are jumbo mortgage rates always higher than conforming?

• Not always; spreads shift with market conditions, investor demand, and your profile, so it is smart to compare quotes from multiple lenders.

Can I avoid a jumbo loan on a $1.3M home with 10% down?

• Likely not; a 10% down payment at $1.3M creates a loan around $1,170,000, which exceeds the 2024 conforming limit and becomes jumbo.

What reserves do jumbo lenders usually require?

• Primary residence jumbo loans often require 6 to 12 months of PITI in verified reserves, with more for second homes or investment properties.

How do property taxes work after I buy in San Mateo County?

• Under Prop 13 your assessed value is typically set at purchase price, annual increases are capped around 2%, and total effective tax rates often run about 1.1% to 1.3% of assessed value.