how much you can ultimately borrow depends of course on your assets your credit score and the value of the property that you re interested in buying these mortgages are considered most appropriate for a segment of high income earners who make 250 000 to 500 000 a year this segment is known as henry an acronym for high earners not rich yet basically these are people who generally make a lot of money but don t have millions in extra cash or other assets accumulated yet 
while an individual in the henry segment may not have amassed the wealth to purchase an expensive new home with cash such high income individuals do usually have better credit scores and more extensively established credit histories than the average homebuyer seeking a conventional mortgage loan for a lower amount they also tend to have more solidly established retirement accounts they often have been contributing for a longer period of time than lower income earners don t expect a big tax break on a jumbo loan the cap on the mortgage interest deduction is limited to 750 000 375 000 if married filing separately for new mortgage debt secured after 2017 7these are just the sorts of individuals whom institutions love to sign up for long term products partly because they often need additional wealth management services plus it s more practical for a bank to administer a single 2 million mortgage than 10 loans valued at 200 000 apiece image by sabrina jiang investopedia 2020special considerations for a jumbo loanjust because you may qualify for one of these loans doesn t mean you should take one out you certainly shouldn t if you are counting on it furnishing you with a substantial tax break for example you re probably aware that you can deduct the mortgage interest you paid for any given year from your taxes providing that you itemize your deductions but you probably never had to worry about the cap that the internal revenue service irs places on this deduction a cap that was lowered by the passage of the tax cuts and jobs act anyone who got a mortgage on dec 14 2017 or earlier can deduct interest on up to 1 million in debt which is the amount of the old cap but for home purchases made after dec 14 2017 you can only deduct the interest on up to 750 000 in mortgage debt if your mortgage is larger you don t get the full deduction if you plan to take out a 2 million jumbo mortgage that accrues 80 000 in interest a year for example you can only deduct 30 000 the interest on the first 750 000 of your mortgage in effect you only get a tax break on 37 5 of the mortgage interest 7this means that you should borrow with care and crunch the numbers carefully to see what you can truly afford and what kinds of tax benefits you will receive with the state and local tax deduction limited to 10 000 a year due to the same tax bill a highly taxed property will also cost you more to own one other strategy compare terms to see if taking out a smaller conforming loan plus a second loan instead of one big jumbo might prove better for your finances in the long haul 