If you find yourself in this situation, make sure that you follow the rules of any other mortgage: Just because the lender says that you can afford it, doesn't mean that you have to borrow it. Large, expensive houses often need large, expensive repairs. Maybe you are moving to a more rural area to improve your quality of life, while at the same time lengthening your commute. Don't be so strapped for cash because of a large house payment that you cannot afford the other things that are important.

If you can afford the monthly payment and decide to take on a jumbo mortgage, pay extra on the principal whenever possible to reduce the amount that you owe on the home. As soon as you get below the magic amount of the conventional loan limit, look into refinancing. If you keep your payment the same, you can substantially decrease the life of the loan. If you would rather save the money each month, you will save quite a bit by sticking with a conventional loan.

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