Are you weighing a jumbo loan against paying cash for a Brentwood home? You are not alone. In this market, most purchases touch luxury price points where financing terms matter as much as price. In this guide, you will learn what counts as a jumbo loan in Los Angeles County, what lenders typically expect, how to make a financed offer compete with cash, and real examples at Brentwood price points. Let’s dive in.
What makes a loan jumbo in Brentwood
A jumbo mortgage is any loan amount above the conforming loan limit set by the Federal Housing Finance Agency. Conforming loans follow Fannie Mae and Freddie Mac standards. Loans above the limit are nonconforming and follow separate lender rules.
Los Angeles County is treated as a high-cost area. As a reference point for 2024, the baseline conforming limit is $766,550 and the high-cost single-family limit is $1,149,825. In practical terms, a loan amount above about $1.15 million is usually a jumbo loan in Los Angeles County. Always verify the current year’s limits at FHFA.gov.
Because many Brentwood homes trade well above that threshold, you will often use jumbo financing unless your down payment brings the loan amount within the conforming cap.
What jumbo lenders expect
Down payment and LTV
- Standard jumbo programs often require at least 20 percent down, which is 80 percent loan-to-value.
- Some conservative programs ask for 25 to 30 percent down, especially at higher loan amounts or for second homes and investment properties.
- Certain competitive programs allow 10 to 15 percent down for very strong borrowers, usually with stricter credit standards and higher pricing.
Cash reserves
- Plan for 6 to 12 months of principal, interest, taxes, and insurance on hand as reserves.
- Larger loans, such as those above roughly $3 to $5 million, can require 12 to 24 months of reserves.
- Lenders typically accept checking and savings, brokerage accounts, and retirement accounts as reserves. Retirement assets may be discounted. Proceeds from a pending home sale can sometimes count with documentation.
Credit score and DTI
- Many lenders look for credit scores of 700 or higher, with 740 and above receiving the best pricing.
- Debt-to-income ratios commonly top out in the low to upper 40 percent range. Strong assets and low monthly debt can support exceptions.
Documentation checklist
Full documentation is the norm for jumbo underwriting. Expect the following:
- Employed: 2 years of W-2s, recent pay stubs, and tax returns if schedules show additional income.
- Self-employed: 2 years of personal and business tax returns with schedules, year-to-date profit and loss, and possibly a CPA letter. 1099s and K-1s may be requested.
- Asset-qualified options: some lenders underwrite to assets rather than traditional income, which requires large, liquid holdings. Bank statement programs may ask for 12 to 24 months of statements.
- All borrowers: recent statements for checking, savings, investments, and retirement accounts, plus letters explaining large deposits or credit inquiries.
Property type and occupancy
- Primary residences get the most favorable terms.
- Second homes and vacation properties often require larger down payments and more reserves.
- Investment properties typically carry tighter rules, higher down payments, and sometimes debt service coverage ratio guidelines.
Rates and product options
Fixed vs. ARM
- Fixed-rate jumbo mortgages are popular for long-term holds and predictability.
- Adjustable-rate mortgages can offer lower initial rates. Many Brentwood buyers choose ARMs if they expect a shorter hold or a future refinance.
Lender types to consider
- Large national banks and their mortgage divisions offer standardized jumbo products with predictable guidelines.
- Regional banks and credit unions can be competitive on price and flexible for local luxury properties.
- Private banks and wealth management groups tailor jumbo financing for high-net-worth clients and may offer relationship pricing.
- Mortgage brokers can shop multiple wholesale lenders and niche programs.
Bridge and specialty options
- Bridge loans or temporary financing can help you close before you sell another property or convert assets.
- Asset-based or portfolio loans are common for high-net-worth buyers with substantial liquid holdings or complex income.
Appraisals in Brentwood luxury
Luxury homes often have unique design, view, or lot characteristics. Finding perfect comparable sales is not always possible, which can lead to appraisal gaps. Lenders typically require a full appraisal for jumbo loans, and local experience matters.
If the appraised value comes in below the contract price, you can respond in several ways. You can use appraisal gap funds to cover a shortfall, adjust contingencies, or work with your agent to present strong comparable sales and detailed upgrade lists. When appropriate, a seasoned local appraiser familiar with Westside Los Angeles can improve valuation accuracy.
Make a financed offer compete with cash
Get real pre-approval, not pre-qualification
A thorough pre-approval that verifies your assets, income, and credit is far stronger than a quick pre-qualification. A conditional underwriting commitment from a reputable lender can put your financed offer close to cash in terms of certainty.
Use a smart contingency strategy
Short appraisal and loan contingency periods can improve your position. If you are comfortable with the risk, selectively removing or shortening contingencies can help. Appraisal gap coverage shows you are prepared to close even if valuations come in low.
Signal strength with capital and timing
- A larger down payment reduces lender risk and gives sellers confidence.
- A sizable earnest money deposit demonstrates commitment.
- A fast close, often 30 days or less when your file is well prepared, is attractive in Brentwood.
Prioritize responsiveness
Choose a lender and team known for fast underwriting, clear communication, and experience with Westside luxury transactions. That coordination reduces friction for all parties and helps your offer stand out.
Brentwood jumbo scenarios
Below are simplified examples that reflect common lender asks. Always confirm the current FHFA limit and your lender’s guidelines.
Scenario A: Entry into Brentwood
- Purchase price: $2,000,000
- Loan status: Above the high-cost limit, so likely a jumbo loan
- 20 percent down example: $400,000 down and a $1,600,000 loan
- Typical asks: 20 percent down, credit score near or above 720, 6 to 12 months of reserves, 2 years of tax returns and recent bank statements
Scenario B: Mid-luxury house
- Purchase price: $4,000,000
- 30 percent down example: $1,200,000 down and a $2,800,000 loan
- Typical asks: 25 to 30 percent down, 12 months or more of reserves, credit score around 740 or higher, full tax documentation and proof of liquidity
- Offer tips: Seek a conditional loan approval, provide strong earnest money, and consider appraisal gap coverage
Scenario C: High-end estate
- Purchase price: $10,000,000
- 50 percent down example: $5,000,000 down and a $5,000,000 loan
- Typical asks: 12 to 24 months of reserves, detailed asset documentation, and portfolio or private bank financing
- Alternatives: Asset-based lending, portfolio loans, or bridge financing
Your next steps
Use this quick checklist to position your Brentwood offer for success:
- Confirm the current FHFA conforming limit for Los Angeles County.
- Align on your target down payment and reserve plan before you write an offer.
- Obtain a full pre-approval or conditional underwriting commitment, not just a pre-qualification.
- Prepare documentation upfront: tax returns, bank and investment statements, and any business financials.
- Discuss contingency strategy, appraisal gap funds, and closing timeline with your agent.
- If you plan to use proceeds from another sale, coordinate timelines so funds are seasoned and available.
If you want a discreet, strategic approach to buying in Brentwood, reach out for tailored guidance on pricing, terms, and negotiation. Connect with Farhad Yasharpour for a private consultation.
FAQs
What is a jumbo loan in Los Angeles County?
- A jumbo loan is any mortgage above the FHFA conforming limit for the county. In high-cost Los Angeles County, amounts above the high-cost limit are considered jumbo.
What down payment do Brentwood jumbo loans usually require?
- Many programs expect at least 20 percent down. Some lenders require 25 to 30 percent down at higher loan amounts or for second homes and investment properties.
How many cash reserves do I need for a jumbo loan?
- Expect 6 to 12 months of principal, interest, taxes, and insurance for many loans, and 12 to 24 months for very large balances or more complex profiles.
Can I get a jumbo loan with 10 percent down?
- Some lenders offer lower down payment jumbo programs for very strong borrowers, but they typically come with stricter credit standards and higher pricing.
How can a financed offer compete with cash in Brentwood?
- Strengthen the offer with a conditional loan approval, a larger down payment, short or selective contingencies, meaningful earnest money, and appraisal gap coverage when appropriate.
