VA Jumbo Loan
Many veterans have already taken advantage of the VA loan. With relaxed qualification standards and more flexibility, it is proven to be the right choice for many to purchase and refinance their homes through this program. However, in most counties, the conforming loan limit with no money down is $417,000. When your home costs more than this, the solution is the VA Jumbo Loan.
A VA jumbo loan is any VA loan greater than $417,000. Qualifying veterans can apply to purchase or refinance their home for up to a value of $1,000,000 through this type of loan. The VA Jumbo mortgage requires the veteran to make a down payment of 25% on any amount over the limit of $417,000. Basically the home is purchased for this down payment and the closing costs, which can be rolled into the loan and do not have to be paid out of pocket.
Plus you get all the benefits of a VA loan! VA Jumbo Loans are a great benefit for veterans and military personnel because it offers more flexible requirements and higher loan amounts than conventional loans. Contrary to popular belief, the Department of Veterans Affairs (VA) does not write the mortgages. Instead, the VA insures the loans that are written by banks and mortgage companies.
Financing (or refinancing) options with VA loans are only available for veterans and active members of the U.S. Military (and spouses – even widows, as long as they don’t remarry).
For example, imagine you are a veteran and the home you intend to purchase is $650,000. In order to find out the down payment you would need, simply start by subtracting the conforming loan limit ($417,000) from the purchase price, which equals $233,000. Multiply this amount by 25%, which equals $58,250. This would be your down payment. This works out to about a 9% down payment. That’s less than the standard down payment on most homes.
The VA program is hard to compare to a conventional loan when you look at it from this point of view. VA Jumbo loans require a higher credit score than the usual VA loans due to the high loan amounts. For loans under $650,000, borrowers must have a minimum FICO score of 720. If you are borrowing over $650,000, the credit requirement is increased to a minimum of 740 FICO.
While 100% financing is limited on VA Jumbo Loans, qualified veterans can still secure financing with smaller down payments and more flexible lending guidelines without having to carry mortgage insurance. VA Jumbo loans are only available to those that qualify for VA loans and their eligibility requirements. It will allow you to choose a home that suits you and your family the best.
Jumbo loans have all of the benefits of a VA loan, plus it allows you to obtain a larger loan amount if that is what you need. Definitely make sure you take advantage of this earned benefit of military service to your country!