As the name already implies, a jumbo mortgage is simply a really huge mortgage. A jumbo mortgage is specifically a mortgage where the amount being financed is greater than the top amount that has been set by GSE (Government Sponsored Enterprise. The GSE is responsible in maintaining access to housing loans and also reducing the cost of these loans in order to give Americans a chance to own a home. This organization is comprised by financial companies nationwide.

One of their duties is to set a maximum guideline amount for a mortgage. Traditionally the maximum amount so far has been $600,000. If there are any mortgage loan that is greater than this amount, this loan is called a jumbo mortgage loan.

Back before the housing crash, the need for jumbo mortgages increased because the price of housing was increasing. Of course back then not all lenders offer jumbo mortgages because this type of mortgage loans automatically carries more risk for the lender because the payments are high. Additionally, there has never been a federal guarantor for the jumbo housing market. But there were certainly some of the lenders who did.

In todays financial crisis, the highest percentage of jumbo mortgages are found in the following states:
- Hawaii (43%)
- California (41%)
- District Columbia (30%)
- New York (22%)

In some places, such as Manhattan, the low-end of the market is actually $750,000 and the average home price there is over $1 million.

These jumbo mortgages are holding back the housing market as reported by the National Association of Realtors. The national share of home sales above $750,000 has fallen to 2.3% this year from 4.4% back in 2007. It is predicted that it will take more than 3 years to sell of homes worth $750,000 if it is to be sold at the current rate.

If you read an article posted by The New York Times, Up in Smoke – The Deposit Vanishes, it is reported that many buyers have lost their deposits because they could not finance their properties.

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