Did you know that you could avoid paying Jumbo mortgage rates, and have a fixed rate options with a VA Home Loan Over $453,100? It’s true! With recent changes, it might make sense for a Veteran to consider using their VA Benefits when they are purchasing a home above $453,100! These larger loans are referred to as VA Jumbo Home Loans.
Loans UP TO $453,100 are 100 percent, no money down loans with no monthly mortgage insurance. Unlike most Jumbo mortgage loan options these days, VA Loans often offer the lowest fixed rate option for a Veteran. We see most Jumbo rates being quoted as Adjustable rate loans.
There’s a one time Guarantee Fee charged by the VA for insuring the loan (to see what your fee would be click here).
Now, for Veteran’s purchasing a home OVER $453,100 you might get better terms on this Fee that is generally seen as VA’s version of Mortgage Insurance.
VA Jumbo Home Loans
To Calculate the down payment on VA Jumbo Home Loans:
Take the purchase price, which for example purposes is $600,000. Subtract the maximum VA Guarantee amount of $453,100. In this case, $600,000-$453,100 = $146,900. The Veteran is required to make a down payment of 25% of the amount above the VA Guarantee (in this case $453,100). $146,900 x .25 = $36,725 down payment, or just under 6.2%!
On a $500,000 purchase price with everything else being the same, $500,000 -$453,100 =$46,900. $46,900 x .25 = $11,725 Down payment, or just under a 2.5% down payment!
In addition, the Funding Fee is LOWER when you make a down payment! Plus! Veteran’s have cheaper closing costs!
BUT – the lower down payment is really not the big deal. Many Veterans we speak to, who are purchasing a $500,000 to $700,000 home, already have cash to put down on the home. What they are looking for is the greatest savings. That’s another great benefit to VA Jumbo Home Loans!
VA Jumbo Home Loan Mortgage Rates are just better than the Conventional Jumbo rates. The loans are backed by the US Government, and it’s a better risk for the banks.
If you previously purchased a home using your VA Benefits then you might still have some of that “Entitlement” available for VA Jumbo Home Loans to purchase a new home!
To Calculate Maximum Entitlement available for VA Jumbo Home Loans, consider the following:
- If your previous home was purchased using a VA Loan, and that loan was paid off by the folks you sold the house to, the full entitlement may have been restored.
- If you sold your home to someone, and allowed them to ASSUME your VA Loan, then you might have the full entitlement restored, if one or more of the purchasers were also Veterans.
- If you still own the home, and you are renting it out – you might be able to purchase a new home using your partial entitlement, but there are several restrictions
In many ways, the procedure for getting a second (or third, or fourth…) VA home loan is similar to obtaining the initial home financing. It’s called having “Partial Entitlement.”
First, veterans must be able to show that they satisfy the basic eligibility rules mandated by the U.S. Department of Veterans Affairs. The terms of eligibility have to do with the amount of time and WHEN you served.
In general you need (more details about Service Dates and VA Loan Eligibility)
- 90 days or more, any part of which occurred during wartime, OR
- 181 continuous days or more (peacetime)
Second, the VA loan has to be received through a lender that has been approved by the U.S. Department of Veterans Affairs. It is important to check with lenders prior to starting to ensure that they are qualified to provide a VA mortgage. The process of becoming a VA lender is not easy and not all lenders are VA approved. (We are approved by VA)
Third, a VA Loan Underwriter is going to “qualify” you based upon your income and your credit history. Technically, the VA does not have a minimum Credit Score – but in GENERAL, it is pretty difficult to get VA Jumbo Home Loans without AT LEAST a 600 credit Score.
With the housing market offering such great values, and mortgage interest rates still historically low… this might be the perfect scenario! We are talking to tons of veterans who moved here with less cash in their pocket from the sale of a previous home, and this is the perfect solution!
Those who are moving here from Florida (for instance) are finding that even with some “dings” in their previous home ownership history are able to buy a home using VA Jumbo Home Loans.
If you are considering a purchase in NC, and you want more information on VA Jumbo Home Loans, please call Steve and Eleanor Thorne 919-649-5058. We have the best mortgage rates available, and the lowest fees!
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