Are you hearing “conforming” and “jumbo” tossed around while you shop in San Mateo and wondering which one fits your plan? You’re not alone. The right choice can shape your down payment, documentation, approval speed, and how strong your offer looks to a seller. In this quick guide, you’ll learn the key differences, what local lenders often expect, and how to decide with confidence. Let’s dive in.
Conforming vs. jumbo basics
Conforming loans meet Fannie Mae and Freddie Mac rules and are at or below the county’s conforming loan limit. They’re eligible for purchase by the GSEs, which often means more standardized underwriting and pricing. You can review a simple overview of conventional lending in the Consumer Financial Protection Bureau’s guide to what a conventional loan is.
Jumbo loans exceed the county’s conforming limit for the property type. Because they are not sold to Fannie or Freddie, they follow investor-specific rules that may mean larger down payments, stronger reserves, and more documentation.
Loan limits change each year and vary by county and by unit count. Always verify the current figure for “San Mateo County, CA” in FHFA’s conforming loan limit table before you shop.
San Mateo buyer expectations
San Mateo County is a high-price market, so many purchases will touch or exceed conforming limits. That makes jumbos common for single-family homes, especially in desirable neighborhoods. Sellers often focus on financing certainty and speed, not just the type of loan.
Knowing how lenders view credit, debt, income, and assets can help you prepare a winning file.
Credit, DTI, and reserves
- Credit score: Conforming approvals can start in the low 600s per GSE rules, but you typically see the best pricing at 680–720 or higher. Jumbo lenders often look for high 600s to low 700s as a floor, with 720+ favored for top pricing.
- Debt-to-income (DTI): Conforming approvals commonly allow up to about 45–50% with strong compensating factors. Jumbo caps vary by investor, often targeting 43–50%. Strong assets can help offset a higher DTI.
- Reserves: Conforming primary residences may need 2–6 months of PITI in reserves depending on the file. Jumbo loans often require more, commonly 6–12 months, and sometimes higher for complex profiles. Be prepared to verify liquid or marketable assets and to season large deposits.
Down payment and PMI
- Conforming: Low-down options exist and can go as high as 97% LTV for qualified buyers, but many San Mateo buyers choose at least 20% down to avoid PMI and improve pricing.
- Jumbo: Many investors look for 10–20% down at minimum. The most competitive jumbo terms often start at 20–25% down. PMI is less common on jumbo loans, so lenders typically rely on larger down payments or special lender arrangements instead.
- PMI basics: On conforming loans over 80% LTV, you’ll typically need PMI. The CFPB explains how PMI works so you can budget accurately.
Income docs and RSUs
- Conforming: Expect pay stubs, W‑2s, and sometimes tax returns. Automated underwriting through Fannie Mae’s Desktop Underwriter or Freddie Mac’s Loan Product Advisor helps speed approvals when files are straightforward. Self‑employed buyers usually need two years of returns.
- Jumbo: Documentation tends to be fuller. Lenders may ask for detailed proof of bonuses, RSUs, or vesting schedules. Some lenders count RSU income only with a two-year history and clear vesting evidence, while others rely on realized, deposited income. If your compensation includes equity, ask upfront how the lender treats it and what history they require.
For a consumer-friendly overview of common mortgage documents, the CFPB has a helpful list of what you may need to provide.
Appraisals and valuation risk
- Conforming: You may receive automated collateral evaluations or appraisal waivers at lower LTVs, which can save time. That depends on the file.
- Jumbo: Appraisals can be more complex on the Peninsula, especially for unique properties or homes with limited comparable sales. Some jumbo investors may require more detailed reports or even a second appraisal. If you anticipate appraisal risk, discuss appraisal gap strategies early.
Approval speed and certainty
- Conforming: More standardized rules and automated underwriting can make timelines predictable, which sellers appreciate.
- Jumbo: Timelines vary by lender. Strong, well-documented borrowers can still close quickly if underwriting is streamlined. The biggest driver is how complete your documentation is when you apply.
Ask your lender for a fully underwritten preapproval, not just a prequalification. Confirm appraisal turn times before you write offers.
Offer strategy in San Mateo
Sellers in San Mateo often look for signs of certainty. A jumbo with strong credit, reserves, and a larger down payment can look just as strong as a conforming loan. What matters most is your ability to close on time.
Ways to stand out:
- Present a fully underwritten preapproval and proof of funds.
- Increase your earnest money deposit or down payment if it fits your plan.
- Discuss appraisal risk with your agent and consider clear appraisal gap language if appropriate.
Buyer checklist
Use this quick list to move fast and stay organized.
Verify your limit
- Check the current figure for San Mateo County in FHFA’s county-level loan limit tool. Remember limits vary by 1–4 units.
Prepare income docs
- W‑2 buyers: 30 days of pay stubs and the last 2 years of W‑2s. Tax returns if requested.
- Self‑employed: 2 years personal and business tax returns, year‑to‑date P&L and balance sheet, and 12–24 months of business bank statements.
Gather asset statements
- Last 2–3 months of bank and brokerage statements. Include retirement account statements if relevant and stock/RSU statements with vesting schedules. Season large deposits.
Organize other items
- Government ID, gift letter and donor proof (if using gift funds), explanations for credit inquiries, and any required legal documents.
Lender questions
Ask these early so you can compare options with clarity.
- Is my target purchase price above the San Mateo conforming limit? If yes, which jumbo options do you offer and how do rates and fees compare to conforming today?
- How do you treat RSU or stock option income and ESPP? What documentation and history do you need to count it?
- What minimum credit score, DTI, and reserves do your best‑priced jumbo products require?
- Do you provide fully underwritten preapprovals? What appraisal options are likely for my file?
- What are your typical turn times from application to clear‑to‑close for conforming versus jumbo?
- Do you have any California‑specific overlays I should know about, such as rules on large deposits or gift funds?
Choosing your path
If your price point fits within the conforming limit, a conforming loan can offer speed and predictable pricing. If your purchase requires a jumbo, plan for stronger documentation, deeper reserves, and potentially a larger down payment. With a clean, complete file, both paths can close on competitive timelines in San Mateo.
If you want a second set of eyes on strategy, from strengthening your offer to planning for appraisal risk, our team is here to help you navigate with confidence. Connect with Maria Afzal to align your financing plan with the right property and neighborhood.
FAQs
What is the difference between conforming and jumbo loans?
- Conforming loans meet Fannie Mae and Freddie Mac rules and fall at or below FHFA’s county limit, while jumbo loans exceed that limit and follow investor-specific requirements.
Where can I find San Mateo’s conforming loan limit?
- Check the current number for San Mateo County using FHFA’s official loan limit tool; limits change yearly and vary by 1–4 units.
How do down payments differ for conforming vs. jumbo?
- Conforming loans can allow low-down options for qualified buyers, while many jumbo lenders look for 10–20% down or more for the best terms, often without PMI.
Which loan type usually closes faster in San Mateo?
- Conforming loans are often more predictable due to automated underwriting, though well-prepared jumbo files from established lenders can also close quickly.
How do RSUs and stock options affect mortgage approval?
- Lenders treat equity income differently; many require a two‑year history and documented vesting for RSUs, while some only count realized, deposited income.
Do appraisals work differently on jumbo loans?
- Jumbo investors may request more detailed appraisals or a second report in high-price markets, which can add time and increase the chance of appraisal gaps.
