• FinanceByDoug

JUMBO loan - The Basics

What is a Jumbo Loan:

Jumbo loans let you borrow more than the conventional loan limit for your area -- $484,350, or $726,525 for high-cost areas -- in order to purchase a home that’s priced above average. Although Jumbo loans let you finance more, they have stricter requirements as a means of risk management for the lender.



  • Buy in cash.

  • Veterans and other eligible borrowers can obtain VA loans beyond conventional limits unless the borrower is doing a 0% down mortgage. When a down payment is provided, VA loans do not have a set limit. (Positive changes coming in early 2020 for VA loans.)

  • Conventional High Balance loan limit for single-family is $726,525 and for a 2 family $930,300. Maximum DTI is 43% and 2 years tax returns required.

Good options are limited when it comes to mortgage loans on high-priced homes, which is a blessing in disguise. Jumbo loan guidelines prevent borrowers from purchasing more house than they can afford.

Other Notes:

The Tax Cuts and Jobs Act of 2017 decreased the amount of debt from which mortgage interest could be deducted, from $1million to $750,000 (the House bill had it reduced to $500,000). Given that personal deductions were increased and that borrowers considering Jumbo loans have a good-sized savings, this shouldn’t weigh too heavily on the mind of the borrower.


Rates, regulations, and loan conditions can and do change. The information presented in this article was accurate, to the writer’s knowledge, as of 11/20/2019.Consult your Sovereign Mortgage Investments Inc. advisor to see if rates, regulations, and loan conditions have changed.