A jumbo loan is a specific type of mortgage. It is designed for high-income individuals, usually making from $250,000 to $500,000 annually. If you fit in this segment, you may know the acronym as “HENRY”, which means “high earners, not rich yet.”
Those who are earning at this level generally will accumulate cash and assets over time. As the acronym suggests that hasn’t happened, yet at least.
This group of Americans are often quite familiar with how a down payment for jumbo loans might work for them.
Individuals in this segment tend to be highly motivated, driven, successful people. They are interested in living well and having the freedom to choose how they spend their time, and money.
In 2003, a Fortune Magazine article coined the term HENRY. They suggested that those in the demographic segment did not have much money left after having paid for their taxes, school, retirement and family costs. Jumbo loan down payment options are specifically made for those who are looking for freedom with their housing choices.
Later in life you may well have enough cash in the bank to purchase that home outright. Right now, a mortgage is still necessary, or at least financially helpful so you can choose to place your assets elsewhere in the meantime. This is where a jumbo loan down payment option can assist you with your financial goals.
Now, you already have an established credit history. You have a solid score of 700 or more, some cash reserves, and you are looking to purchase a home that reflects your hard work and success.
The Tax Implications – How to Consider Jumbo Loan Down Payment Options
Mortgage interest has tax implications, no matter what kind of mortgage you acquire. A jumbo loan has no better or worse tax implications than a conventional mortgage, except when it comes to the upper limits.
The IRS has placed a cap on how much of a deduction you can take for mortgage interest. If your jumbo loan is less than $1 million it makes no difference at all. Over a million, there is no further deduction. So, if the tax break matters to you, consider making the jumbo loan down payment amount to bring your total mortgage down to $1 million or less. Talk to your accountant because rules change.
If you are earning in the $250,000 to $500,000 range, have your eye on a property valued at more than $500,000 and have a solid financial situation, it is worth considering a jumbo loan. Low jumbo loan down payment choices are available (like the Jumbo Loan 10 Down option), giving you the freedom to choose where you live, and how you spend your money.
Click here for details about your options for down payments on jumbo loans, or to get qualified for a jumbo mortgage.