Shopping for a home in Manhattan Beach and wondering if you’ll need a jumbo loan? You’re not alone. With many properties priced above standard limits, jumbo financing is a common path for local buyers. In this guide, you’ll learn what a jumbo loan is, how to qualify, what it costs, and the local factors that can affect timing and approval. Let’s dive in.

What is a jumbo loan

A jumbo loan is a mortgage that exceeds the Federal Housing Finance Agency’s conforming loan limit. Because these loans are not purchased by Fannie Mae or Freddie Mac, they are considered non-conforming and are underwritten by private lenders.

Since jumbos are not agency-backed, lenders usually apply stricter standards. You’ll see higher minimum credit scores, larger down payments or reserves, and more documentation compared with conforming loans. Conforming limits change yearly, so check the latest FHFA tables when you start your search.

Why Manhattan Beach buyers need jumbos

Manhattan Beach is a high-demand coastal market where many homes sell above both baseline and high-cost conforming limits. That means you may need a jumbo loan even if you’re bringing a significant down payment.

In competitive situations, a strong, fully underwritten pre-approval can help your offer stand out. Many buyers work with lenders who can pre-underwrite the file so you can write tighter contingencies with confidence.

What lenders look for on jumbo loans

Credit score and history

Lenders typically prefer higher scores for best pricing. Many competitive jumbo programs favor scores in the 700 to 760-plus range. A clean credit history and well-documented explanations for any issues in recent years also help.

Down payment and LTV

Expect larger down payments than with conforming loans. For a primary residence, many lenders allow 10 to 20 percent down for well-qualified borrowers, while more conservative options start at 20 to 30 percent. Second homes and investment properties usually require higher down payments.

Debt-to-income ratio

Jumbo programs often expect lower DTIs than some conforming programs. Typical maximums range from about 36 to 45 percent. Very strong files with substantial reserves and low loan-to-value may allow some flexibility.

Cash reserves and assets

Plan to show significant reserves measured in months of principal, interest, taxes, and insurance. Six to twelve months of PITI is common, and very large loans or higher-risk scenarios may require more. You’ll document liquid and non-liquid assets with bank, brokerage, and retirement statements.

Income documentation

Most standard jumbo loans are full documentation. If you’re a W-2 borrower, you’ll provide recent pay stubs, W-2s, and tax returns. If you’re self-employed, expect two years of tax returns and a detailed review of income. Some lenders offer bank-statement or other non-QM options for non-traditional income, usually with higher rates and stricter reserves.

Appraisals and valuation

High-value or unique properties can require more extensive valuation. Lenders may order two appraisals or an appraisal plus a price opinion when comparable sales are limited. In coastal Manhattan Beach, ocean views, custom builds, and small-lot layouts can make valuation more complex and time consuming.

Jumbo loan options and rates

Fixed-rate vs ARM

Jumbo loans come in fixed terms like 15-, 20-, or 30-year, and in adjustable-rate formats such as 5/1 or 7/1 ARMs. ARMs often start with a lower rate, but your payment can rise when the rate adjusts. Consider the time horizon for your home and your comfort with future rate risk.

Portfolio and non-QM programs

Many jumbo loans are held in a lender’s portfolio, which can allow more flexibility on terms and documentation. Non-QM options serve borrowers who don’t fit standard guidelines, often at higher rates and with more reserves required. If you need alternative documentation, compare costs and terms carefully.

Mortgage insurance on jumbos

Private mortgage insurance is uncommon in the jumbo space. Lenders typically manage risk with higher down payments and reserve requirements instead. If you’re comparing low-down-payment options, model total costs and pricing differences across lenders.

Rate and fee shopping

Jumbo pricing varies widely by lender, loan size, structure, and market conditions. Compare APR, discount points, and origination fees, not just the rate. Ask about lock policies, float-down options, and lock extensions so you understand the timeline and cost if your closing runs long.

Manhattan Beach factors that affect approval

Competition from cash buyers

In luxury coastal markets, all-cash offers are common. To compete, you may want a fully underwritten pre-approval, shorter contingency periods, and clear communication around appraisal readiness. In limited cases, buyers with strong reserves consider modifying appraisal contingencies, but this carries risk and should be weighed carefully with your lender.

Coastal appraisal challenges

Ocean proximity adds value and can limit comparable sales. Unique custom homes, view lots, and small footprints often require specialist appraisers and more comps drawn from a broader radius. Build time in your offer for valuation, especially during busy seasons.

Insurance: flood, earthquake, coastal risks

If a property is in a FEMA Special Flood Hazard Area, the lender will require flood insurance. Earthquake insurance is not typically required by lenders in California, but it is strongly recommended and can significantly affect monthly costs. Coastal homes can also face higher homeowner premiums and exclusions for certain perils, which can impact your debt-to-income ratios during underwriting.

Property taxes and assessments

California’s Proposition 13 sets a base rate around 1 percent of assessed value at purchase, plus local assessments and potential Mello-Roos. On higher-priced homes, this creates sizable annual tax bills. Budget for taxes, HOA dues if applicable, and insurance when you evaluate affordability.

Condos and HOAs

Condo purchases often require lender approval of the project’s financials, litigation status, and owner-occupancy metrics. Some projects can trigger additional reserve requirements or delays. If you are targeting a Manhattan Beach condo or mixed-use building, verify project eligibility early to keep your timeline on track.

Timeline, costs, and how to prepare

Pre-purchase preparation

Start with a conversation and then move quickly to a full pre-approval with a lender experienced in jumbo loans. Gather two years of tax returns, recent pay stubs, and two to three months of bank and brokerage statements. Review your credit early to correct errors and prepare explanations for any large deposits.

Choosing the right lender

Interview multiple lenders who regularly finance high-balance coastal properties. Compare rate options, reserve requirements, documentation flexibility, and appraisal panel depth. Ask how long you can lock, whether float-down options exist, and what lock extensions will cost.

Appraisal, underwriting, and timing

Jumbo loans often take longer than conforming loans. A realistic window is 30 to 60 days, with the appraisal timeline as a key variable. Be ready to respond quickly to underwriter requests for deposit clarifications, updated statements, or additional asset documentation.

Closing costs and fees

Plan for total closing costs in the range often seen in California purchases, with the understanding that high-priced homes can drive certain line items. Expect higher appraisal fees for complex or multiple appraisals, potential lender origination fees, title and escrow, and transfer taxes. If your lock needs to be extended, that can add cost.

Buyer checklist

• Confirm the current FHFA conforming loan limit for the year.
• Shortlist two to three lenders with strong jumbo and coastal experience.
• Gather two years of tax returns, recent pay stubs, and two to three months of statements.
• Document reserves. Six to twelve months of PITI is common for jumbos.
• If buying a condo, verify project eligibility and HOA financials early.
• Order a preliminary flood zone check and review FEMA maps if near the coast.
• Obtain homeowner and earthquake insurance quotes to model your full payment.
• Build time into your offer for appraisal scheduling and potential second reviews.

Smart offer strategies with financing

• Strengthen your pre-approval. A fully underwritten file can help you compete with cash.
• Tighten timelines where practical. Coordinate appraisal scheduling before you write.
• Be thoughtful about contingencies. Only adjust appraisal or financing contingencies if you have strong reserves and a clear risk plan.
• Communicate clearly. Share your lender’s readiness and milestones with the seller side to build confidence in your closing.

Work with a local advisor

A jumbo purchase in Manhattan Beach blends finance, valuation, and lifestyle choices. You deserve an advisor who understands the coastal market and can coordinate the right team. From connecting you with experienced jumbo lenders to helping you plan insurance and timing, we guide you through each step so you can focus on finding the right home.

If you’re considering a move, let’s talk about goals, budget, and timing. Schedule an Appointment with Kristin Warrick to get a clear, personalized plan.

FAQs

Do Manhattan Beach buyers always need 20 percent down for a jumbo?

• Not always. Some lenders allow 10 to 15 percent down for very strong borrowers, but many prefer 20 percent or more, and second homes or investments usually require higher.

What credit score do I need for a jumbo loan in Los Angeles County?

• Many competitive programs prefer 700 to 760-plus. Lower scores may be possible, but usually at higher rates and with stricter reserve requirements.

How long does a jumbo loan take to close in California?

• Plan for 30 to 60 days. Appraisal complexity, documentation requests, and condo project reviews can extend the timeline.

Are Manhattan Beach condos harder to finance with a jumbo loan?

• Often, yes. Lenders may review HOA financials, litigation, and owner-occupancy. Some projects require extra reserves or may be ineligible, so check early.

Will I need flood or earthquake insurance for a Manhattan Beach home?

• Flood insurance is required if the property is in a FEMA-designated flood zone. Earthquake insurance is optional but recommended in California and affects overall housing costs.