I want to take out a mortgage, but the value of the house is greater than $417,000, which is the amount when a mortgage becomes a Jumbo loan. I looked for more information on BankRate.com, and even tried out their calculator, but I could not find a clear and concise explanation of the down payment required for the Jumbo loan.

All the calculators I've found only ask for the loan amount and down payment percentage. They don't tell my what my owed principal would be, once the down payment is collected and the loan is initiated. If the value of the house is greater than the jumbo loan limit ($450,000), but my down payment ($60,000) takes the loan below the limit ($390,000), do I still need to get a jumbo loan?

I apologize for being redundant, because this question has already been asked, but the answer given was never accepted and didn't actually answer the question being asked. This question is located at "Do jumbo loan limits apply to the amount borrowed or to the property price? Can I avoid a jumbo with a higher down payment?".


1 Answer 1


The loan is the loan, the down payment is not part of the loan. The principle amount owed on the loan at the beginning of the loan is the amount of the loan.

If your loan amount is $390,000 then that's below the "jumbo" classification. Your down payment is irrelevant.

Lenders may want or require 20% (or any other amount) down so the loan will meet certain "loan to value" ratio requirements. In the case of real estate, the lenders in general want a 20% down side cushion before you're "upside down" (owe more than the home is worth). This is not unique to homes and is common in many secured lending instruments; like cars for example.


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