At What Point Does A Mortgage Become A Jumbo Mortgage?

Jumbo mortgages are mortgages too big for an area's government loan limit. Limits vary based on ZIP code and property type.

April 16, 2020 by Dan Green

When it comes to home loans, we each have a limit for how much we can take on comfortably.

The U.S. government is no different.

Through loan limits, the government sets a maximum dollar amount for how much loan it will back, insure, and guarantee.

In many parts of the country, the maximum figure is $484,350 for a house, or a condominium; with higher figures for houses with multiple units.

Beyond these limits, the loans become jumbo.

Jumbo mortgages are mortgages too big for an area’s government loan limit. Limits vary based on ZIP code and property type.

This year’s mortgage loan limits are:

  • 1-unit homes: $484,350 to $679,650
  • 2-unit homes: $620,200 to $870,225
  • 3-unit homes: $749,650 to $1,051,875
  • 4-unit homes: $931,600 to $1,307,175

Jumbo loans let you buy an “expensive” house and put a mortgage on it. Without jumbo loans, you’d be capped at $484,350, or whatever the limit is for your particular scenario.

An added bonus: because jumbo loans aren’t government-backed, lenders can write their own rules. And, they do.

Jumbo loans don’t usually come with the paperwork requirements of other loan types; and, lenders often make common-sense decisions that deviate from “the playbook”.

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