VA Jumbo Mortgage
If you are a qualified veteran looking to buy a house, you are probably well aware of all the benefits associated with a VA Loan. However, you may not know about the relatively new increased loan limits that are currently available. As a qualified member of the military, you were originally entitled to a basic entitlement of $36,000 on loans up to $144,000.
Today, the VA has made some changes that make it possible to buy single-family homes that are more expensive with zero down payments. Depending on your county limits, you can now get a guaranty of up to 25% on houses that are in the upper six figure price range. This is great news for veterans who live in expensive counties where housing prices are exorbitant.
How Va Jumbo Loans Work
Besides the increased loan limits on single-family homes, it is now possible to get a jumbo loan through the VA. A jumbo loan is the industry term for any loan that is more than $417,000. Most counties now have a loan limit that is higher than this amount, so you will be able to purchase a large, expensive house with a full VA guaranty. There are even some counties where the loan limit is over $1,000,000. Loans of this amount are considered super jumbo loans and can still be guaranteed by the VA for 25% or $250,000 with no down payment.
If you live in a county where the loan limit is lower than the house you plan to purchase, you can still obtain a VA Loan with a few exceptions. The VA will only guarantee up to the loan limit, which leaves the remaining cost uninsured. To compensate for the amount that is not guaranteed, you will need to make a down payment of 25% of the uninsured amount. For example, if you find a house for $700,000 but live in a county where the loan limit is $500,000, you will be required to pay 25% of the $200,000 not covered by the VA.
While VA Jumbo and Super Jumbo Loans are available, you should take care to see if it’s right for you. The industry considers these loans risky, so the interest rates tend to be much higher than they would be with a traditional loan. Also, it can be tricky to find a lender who is willing to issue a jumbo loan without a down payment. That being said, it is possible to find lenders willing to assist you and make the process as affordable as possible so you can purchase that dream home.
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