Buying in Alamo and hearing the term “jumbo” thrown around? In a market where many homes sit above standard loan limits, it is normal to wonder which financing track fits your purchase. You want clarity, predictable costs, and a smooth close. In this guide, you will learn when a mortgage becomes a jumbo in Contra Costa County, what lenders look for, how rates work, and practical strategies that fit Alamo’s high-value homes. Let’s dive in.
Jumbo loan basics in Alamo
A jumbo loan is any mortgage that exceeds the conforming loan limit set by the Federal Housing Finance Agency. That limit changes each year and can vary by county. If your loan amount will be higher than Contra Costa County’s current limit, your financing moves into the jumbo category.
To confirm the current year’s county limit, check the FHFA’s resource for conforming loan limits. Start at the main site and look for the Conforming Loan Limits tool or map on the FHFA website. Many Alamo home prices exceed the county limit, so jumbo financing is common.
Why this matters: conforming and jumbo loans differ on underwriting, available products, pricing, and reserves. Knowing which bucket you fall into helps you plan your down payment, documentation, and timing.
What lenders require for jumbos
Credit, DTI, and reserves
Lenders focus on a strong borrower profile for jumbo approvals. A credit score of 700 or higher is typical, and many lenders price best at 740 or above. Expect debt-to-income caps in the 43 percent to 50 percent range depending on the program, with better pricing at lower DTI levels. Substantial reserves are common, and stronger profiles often unlock better terms.
Income and documentation
Be ready to verify income and assets with a fuller document set than most conforming loans. You will typically provide:
- Recent pay stubs covering 30 days and year-to-date earnings
- W-2s for the past 2 years (if applicable)
- Personal federal tax returns for 2 years, plus business returns if self-employed
- Bank and investment statements for the last 2 to 3 months to verify assets and reserves
- Signed purchase agreement, proof of earnest money, and explanations for large deposits
- Documentation for other income sources such as rental, bonus, or commission
If you are self-employed or have complex income, some lenders offer bank-statement programs that use 12 to 24 months of statements to qualify. These fall under non-QM or portfolio products and usually come with higher rates and lower maximum loan-to-value.
Appraisal and property review
A full appraisal is standard for jumbo loans, and unique or high-value properties may need specialized appraisal work. Condos and homes in HOA communities can trigger extra lender reviews. In Alamo, custom homes and large lots are common, so you should plan for a thorough appraisal process.
Down payment, LTV, and reserves
Down payment and reserve rules drive your overall plan. Here is what you will often see in jumbo lending:
- Primary residence: up to 80 percent LTV is common with 20 percent down. A few lenders may allow 85 to 90 percent LTV for very strong borrowers, usually with pricing premiums and higher reserve requirements or a second lien.
- Second home: lower maximum LTV, often 70 to 75 percent.
- Investment property: tighter still, often 70 percent or less.
Reserve expectations scale with risk:
- Primary residence: often 6 to 12 months of PITI in liquid reserves
- Second home: commonly 12 months of PITI
- Investment property: often 12 to 24 months of PITI
Lenders also review how you sourced funds for closing. Large recent deposits will need explanation and documentation. Because conventional PMI is rarely used on true jumbos, buyers either bring a larger down payment, use a second mortgage, or accept higher pricing from the lender when available.
Rate and pricing drivers
Jumbo loan pricing moves with markets and investor appetite. Key factors include:
- Investor demand: Many jumbo loans are held by banks or sold to private investors. When demand is high, jumbo rates can tighten relative to conforming.
- Borrower profile: Higher credit, lower LTV and DTI, and stronger reserves improve pricing.
- Loan amount tier: Larger loan buckets can price differently, for example above $2 million.
- Product type: 30-year fixed and 15-year fixed price differently than ARMs. ARMs can offer lower initial rates but carry reset risk.
- Property type and occupancy: Condos, second homes, and investment properties often price higher.
Historically, jumbo rates are often slightly above conforming. In some periods, banks with strong balance sheets have priced jumbos close to or even below conforming, but this can change quickly. You can also pay points to lower your rate or use lender credits to offset closing costs. Always compare APRs and total cash to close across quotes.
For general guidance on how to shop and compare mortgages, review the CFPB’s mortgage resources.
Financing strategies for Alamo buyers
Alamo sits within a high-value corridor in the greater Oakland–Hayward–Berkeley area, so you will likely evaluate at least one jumbo path. Common strategies include:
- Traditional jumbo fixed-rate with 20 percent or more down. Straightforward for buyers with strong credit and ample reserves.
- Larger down payment to stay within conforming limits. This can unlock agency pricing, but it requires more cash.
- Second mortgage or piggyback structure. Helpful to reduce the first-lien size, though the second lien adds complexity and may price higher.
- Portfolio or relationship lender. Local or private banks may hold the loan on their own balance sheet and offer flexible underwriting for complex income or significant assets.
- Non-QM or bank-statement programs. Useful for self-employed buyers. Expect tighter LTV limits and higher rates.
- Bridge financing. Lets you buy before selling your current home, which can strengthen your offer, though carrying costs are higher.
Property type also matters. Custom homes and large lots are typical in Alamo and may require specialized appraisals. If a property has an HOA, confirm documentation early so your lender can review eligibility.
Your jumbo-prep checklist
Come to your first lender conversation prepared. This helps you get accurate quotes and faster pre-approvals.
- Consent for a credit report
- Two years of federal tax returns, plus business returns if applicable
- Recent pay stubs and W-2s, or 12 to 24 months of bank statements for bank-statement programs
- Asset statements for the last 2 to 3 months across checking, savings, brokerage, and retirement accounts
- A list of liabilities such as student loans, auto loans, and mortgages
- Estimated down payment amount and, if in contract, a signed purchase agreement
Key questions to ask each lender:
- How does my rate and cost change by credit score, LTV, and loan size?
- How many months of PITI reserves do you require for a primary home versus a second home?
- Do you offer portfolio or non-QM options for my income type?
- What documentation is needed to verify the source of funds and explain large deposits?
- How long is your lock period, and what are the fees or points to lock?
- Do you service loans or sell them, and to which investors?
- Do you have any overlays for condos or unique properties?
You can also verify a lender’s licensing history using the NMLS Consumer Access tool.
Risks and timing to plan for
- Appraisal risk: High-value homes may have fewer comparable sales, which can affect valuation. Be ready for the possibility of a value review or a second appraisal.
- Liquidity and market moves: Jumbo pricing can shift quickly. Discuss a strategy for rate locks and any extension terms with your lender.
- Closing costs: Larger loan amounts and transfer taxes can increase total fees. Compare total APR and cash to close, not just the note rate.
- Contract timing: If you are buying and selling, consider bridge financing or a plan to avoid a contingent offer.
- Lender overlays: Different banks and investors can produce very different outcomes for the same borrower. Get written pre-approval terms and compare side by side.
Next steps for Alamo buyers
- Verify the current conforming loan limit for Contra Costa County using the FHFA conforming loan limits resource to see whether your target loan amount is jumbo.
- Assemble your documentation and request pre-qualification quotes from at least three sources: a national lender, a local or private bank, and a mortgage broker that handles jumbo and non-QM.
- Compare rates, points, reserves, and maximum LTV in writing. Use the CFPB’s mortgage shopping guidance for a structured approach.
- If your income is complex, ask about bank-statement programs, asset depletion analyses, or portfolio loans. For general program context when loans are conforming, review Fannie Mae and Freddie Mac.
If you want a clean, confidence-building plan for a jumbo purchase in Alamo, we are here to help you line up the right strategy before you write an offer. Get tailored guidance on timing, structure, and property fit, and move into your next home with clarity. Schedule a conversation with Ria Rossi to map your path.
FAQs
What is a jumbo loan in Contra Costa County?
- A jumbo loan is any mortgage amount above the county’s current FHFA conforming loan limit, which you can confirm on the FHFA website.
How much down payment is typical for an Alamo jumbo?
- Many lenders allow up to 80 percent LTV on a primary home, with some offering 85 to 90 percent for strong borrowers at higher pricing and with larger reserves.
How many months of reserves do jumbo lenders require?
- Expect 6 to 12 months of PITI for a primary home, about 12 months for a second home, and 12 to 24 months for investment properties, depending on the program.
Are jumbo rates always higher than conforming rates?
- Often they are slightly higher, but in some market periods strong investor demand narrows or even inverts the spread, so it pays to compare quotes.
Can self-employed buyers get a jumbo loan in Alamo?
- Yes, with full tax returns or through bank-statement and non-QM programs that usually carry higher rates and lower maximum LTV.
Should I choose a fixed rate or an ARM for a jumbo?
- Fixed loans offer payment stability, while ARMs can start lower but carry reset risk; compare total cost, time horizon, and lock options across lenders.
