How to Buy an Expensive House with a VA Jumbo Loan

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How to Buy an Expensive House with a VA Jumbo LoanWith the housing market picking up the past couple of years, more individuals and couples are attempting to purchase homes. Between the different loan types and programs now available, buying a home can be easier than one would ever imagine.

Veterans who want to buy more expensive homes have the option of getting a VA Jumbo loan. Veterans Affairs loans have always been a convenient option for military personnel. Here is some information on how that can be accomplished.

What are Jumbo Loans & How are They Different?

Jumbo loans are loans that are for an amount that is higher than the conventional loan amounts, which currently are at $453,100 in most of the U.S. and $636,150 in Alaska and Hawaii. Freddie Mac and Fannie Mae purchase loans from lenders and have set maximum amounts for a loan to be considered a conventional conforming loan. Loans higher than that amount are considered Jumbo loans.

Besides the loan amount being higher, there are other ways that Jumbo loans are different.

  • Higher interest rates
  • Require high credit scores
  • Higher income required
  • Employment history for a longer period is necessary
  • Require the borrower to have enough cash to make a few months of mortgage payments
  • Down payments are 10 percent to 15 percent higher than a conventional loan.

Jumbo Loans for Veterans

The good news for veterans is that Jumbo loans are not just for certain home buyers. Many were under the mistaken belief that because veteran loans offered special benefits they could not be offered as this type of loan. This is a misconception, because veterans can also get Jumbo loans if they meet the eligibility requirements.

Another piece of good news for veterans is that they have very competitive interest rates. Whereas regular loan rates are .25 percent and .5 percent higher than conventional loans, veteran’s Jumbo loans usually are not.

How to Buy an Expensive Home with a VA Jumbo Loan

Veterans can still buy an expensive home with a Jumbo loan. However, it will take a little calculation to get correct guarantee amounts and possible down payments. The Department of Veteran Affairs guarantees 25 percent of the $453,100, so if you purchased a home for $500,000, you would be required to have a down payment of 25 percent of the amount over $453,100, which would be $11,725 ($500,000 – $453,100 = $46,900 X .25 = $11,725).

While interest rates are usually not higher for veteran Jumbo loans, they could be higher. But the amount is still substantially lower than if you would have to put down a down payment on a conventional Jumbo loan. The Veteran Affairs program makes it very affordable for military personnel to purchase a high-end, expensive home.

The Department of Veteran Affairs provides veterans with an entitlement, which is a dollar they agree to pay back for the veteran towards the purchase of a home. The basic entitlement is $36,000, but it’s much higher when all is said and done. The only situation where a veteran would have to pay a higher down payment would be if they’ve already used up some of the entitlement on a previous mortgage.


Am I Eligible for a VA Loan? Find Out Now

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Am I Eligible for a VA Loan?

Am I Eligible for a VA LoanBeing eligible for a VA loan is a great possibility if you have served in the armed forces, but being a vet is only the first test.

Veterans appreciate gestures of gratitude for service rendered to their country. These can take the form of verbal acknowledgement or show up as a financial donation to aid wounded warriors.

The government also provides benefits that demonstrate the high value placed on military service. Most well-known are medical services yet there is another form of assistance of equal significance. The United States Department of Veterans Affairs (VA) guarantees home mortgage loans for qualified borrowers.

How Do VA Loans Work?

Vets apply for mortgage loans like everyone else: through a private bank or finance company. Important to remember is the fact that the government is guaranteeing the loan, i.e. agreeing to pay the lender in the event the borrower defaults, not advancing the money itself.

For starters, the bank will require a VA Certificate of Eligibility (COE) before considering an applicant eligible for a VA loan. COEs are issued based on years and character of military service, and are obtained through the lender, a local VA office or the VA website. Subsequently, the lender will collect documentation to verify the information on the loan application.

The difference between the VA loan and a conventional mortgage is that underwriters will apply VA standards in approving or denying the application.

Do I Need Good Credit?

Yes, but it’s all relative. Whereas a conventional mortgage will require a strict minimum credit score of 620, applications with a VA guarantee are likely to receive more latitude since the bank knows it will be paid back one way or the other.

Overseas deployments and frequent relocations can take a toll on a veteran’s finances, so the VA requires banks to look at the whole borrower profile before rejecting an application based on credit scores.

How Much Do I Need to Earn to Be Eligible?

A borrower’s revenues will rise and fall on how much money is sought. When underwriting mortgage loans, lending institutions rely on an index called the debt-to-income ratio. This means that they will tabulate all the monthly obligations—in other words, the bills—and add the proposed monthly mortgage payment.

If this sum is less than 41 percent of the veteran’s total income, the bank is then confident that the borrower makes enough money to manage the loan payments.

Do I Need Money in the Bank?

It is not unusual for a finance company or bank to desire a financial cushion to carry the mortgagor through hard times. However, VA loans require only sufficient funds on hand for the down payment, closing costs and any additional equity not covered by the down payment.

Are There Any Restrictions on the Property?

The veteran might meet all the criteria and is eligible for a VA loan, but the loan can fall through if the house does not show clear ownership title for the seller or current owner. Unlike conventional loans, the bank can loan up to 100 percent of the property value when processing a VA application.

As a VA Loan Specialist, I can help you navigate through the VA loan process. Contact me or click the big red Apply Now button and let’s get started.


AZ VA Home Loan

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AZ VA HOME LOAN STREAMLINE REFINANCE-

All but 2 months ago here in Arizona we thought the AZ VA Streamline Refinance was gone forever, a victim to the ever increasing interest rate climate over the last few months . But the funny part about the mortgage industry is that just when we think we have it figured out it throws us another curve ball. I say this because over the past couple of weeks we have seen a large decrease in VA Streamline Refinance rates putting Arizona Veterans and Active Duty Military homeowners back into play who may have missed out on the last refinance boom affording them the opportunity to possibly save hundreds of dollars a month and even thousands of dollars over the life of the loan.

The AZ VA Home Loan Streamline Refinance is probably one of the most unique loans that are available for Veterans and Active Duty Military. With no appraisal needed (saving you $450), along with no income documents (Pay Stubs, W-2’s, Tax Returns), or even bank statements required, this loan is a walk in the park. Here is how I explain the AZ VA Home Loan Streamline Refinance process to my Veteran and Active Duty Military clients here in Arizona… “We simply shuffle some paperwork and roughly 20 days later close your loan with zero out of pocket expenses.” Okay, so there is more to it than that, but you get the point right? However what I mentioned was true. The VA Streamline Refinance allows you to roll all of the costs into the home loan essentially allowing you to close escrow and not bring one dollar to the closing table.

If your current VA interest rate is at 5% or higher, the AZ VA Home Loan Streamline Refinance may be right for you. For a free VA Streamline Refinance quote and analysis feel free to give us a call directly at 602-908-5849.

Please know that we are here to serve you with all of your VA Streamline Refinance needs.

MORE THAN 1 AZ VA HOME LOAN AT A TIME-

Many veterans in Arizona and that nation have no idea they are actually able to use more than one AZ VA Home Loan at a time. Yes, it’s true! A Veteran may actually have more than one home loan at a time. How can this be, you ask? It’s called VA Bonus Entitlement. Simply stated, as long as you have sufficient VA Entitlement for the AZ VA Home Loan, you can have more than one at a time. There are a lot of Veterans out there today that would love to be able to purchase a new home – in a more desirable location, better school district, with more square footage – who have no idea that they really can. Let’s take a look at an example below.

A Veteran buys a home with his or her AZ VA home Loan in 2006 for $150,000 and would love to take advantage of the market that we are in today. Our Veteran can actually rent out their current home and use that rental income to offset that mortgage payment up to 75% . Most mortgage products will require you to have 25% equity in the home or you must have rented out that property for two years to do this, but not with a VA Home Loan. Our Veteran now has the ability to go out and shop for a new home with their VA Home Loan from $144,000 up to $267,000 with NO down payment! As a Veteran, you must have sufficient VA Entitlement available and the home being purchased must be owner-occupied. [This summary is based on a $350,000 loan amount, loan term of 360 months and an interest rate of 4.5%.]

Are you interested in seeing if the VA Bonus Entitlement is something that you are eligible for? Give me a call – I speak your language and I know what it means to serve.

AZ VA HOME LOAN MYTHS-

For as long as I have been serving Veterans with their AZ VA Home Loan Benefits I have heard a number of misconceptions as it relates to our VA Home Loan Benefits. These misconceptions, or shall we say myths, can have a negative impact on us for obvious reasons. For example a Veteran may opt to go with a more expensive mortgage product like a FHA Home Loan which can end up being significantly more expensive over time. So back to the myths. What are they? Let’s take a look at the top 5 VA loan myths that heard throughout my career as a Mortgage Banker Specializing in VA Home Loans.

AZ VA Home Loan MYTH # 1. VA Home Loans take too long to close.

Not true. Many lenders quote 45-60 days to close a AZ VA Home Loan. However, just because it may take that particular lending institution 45-60 days to close does not mean that is how long it takes to close a VA Home Loan. The VA Home Loans that we close at PrimeLending typically take no more than 30 days.

AZ VA Home Loan MYTH # 2. VA Appraisal Process is much more difficult.

Again, not true. The reality is I would not be in business if this were the case as90% of the Home Loans that I originate are VA. VA Home Loans have multiple steps in place to protect the Veteran from overpaying for the home.

AZ VA Home MYTH # 3. VA Home Loan qualifying is much more difficult.

The VA Home Loan is the most unique home loan that exist and one of the things that I love about it is that VA has applied common sense lending practices to serve Veterans. However, it’s entirely untrue to say that it’s more difficult. The truth is that in some ways they make it much easier for a Veteran to obtain financing take for example the no down payment option.

AZ VA Home Loan MYTH # 4. You can only have 1 VA Home Loan at a time.

False. A Veteran can actually have more than 1 VA Home Loan at a time as long as they have sufficient entitlement. This allows Veterans to seek financing for another home in a more desirable location while maintaining the property they are vacating that currently has a VA Home Loan on it.

AZ VA Home Loan MYTH # 5. A Veteran can only use their VA Home Loan once.

I have heard this from a lot of Veterans that served during the Korean and Vietnam conflicts. However, it’s not true. A Veteran may use his VA Home Loan as many times as they would like as long as they have sufficient entitlement.

So there you have it, the top 5 VA Home Loan myths. My hope is that you learned something about your VA Home Loan benefit after reading this. Of course, if you have any questions you may contact me me directly at my office at 480-538-4980 or email me at jimmy@primelending.com

AZ VA HOME LOANS –

Many Veterans when searching for an Arizona VA Home Loan rarely stop and ask if the company in which they are seeking financing specializes in Arizona VA Home Loans. This is not a question that typically comes to mind when applying for a loan, however I can assure you it’s one that it should. The reality is that there are a lot of lending institutions that may be able to originate a VA Home Loan, but it does not automatically mean that they know exactly what they are doing. I see this time and time again when Veterans come to me frustrated, and feeling defeated because the lender in which they started with seems rather lost and unfamiliar with the process creating feelings of uneasiness and anxiety.

When explaining why Veterans should use a Mortgage Banker that specializes in Arizona VA Home Loans, I often times use this analogy. The United States Marine Corps is famous for every Marine being a basic rifleman. However, within the Marine Corps there are certain specialities that exist. For example you have Infantry Rifleman who trains daily for the front lines of combat, and on the other hand, you may have a Marine who’s job is to work on the electronics of an aircraft. I think it’s safe to say that you would not want the Infantry Marine working on the aircraft, and the Aircraft Marine shooting highly technical weaponry. Why is this? Each Marine has been trained in their own area of expertise and may not be 100% familiar with how each others job works. Keep in mind they are both Marines yet have 2 totally different jobs. That’s kind of like how the Mortgage industry is. Just because somebody is a Mortgage Banker or Broker does not automatically make that person qualified to originate your VA Home Loan.

then-now

You deserve somebody who specializes in Arizona VA Home Loans. Somebody who understands your sacrifice, somebody who speaks your language and knows what it means to serve. Arizona VA Home Loans are unique to any other type of home financing loan that exist today, and you need to be working with somebody that originates VA Home Loans exclusively. So if you are in the market to purchase a home, I would be honored to serve you! Helping Veterans is my passion and purpose! So please call me, I speak your language and I know what it means to serve 480-538-4980.

THE AZ VA HOME LOAN JUMBO-

Many veterans do not understand all of the benefits that exist when it comes to their Arizona VA Jumbo Home Loan. Truth be told, many lenders don’t either… so if lenders are confused, how then do we expect our veterans to know. Sadly, many don’t. This statement cannot hold more truth when it comes to the Arizona VA Jumbo Home Loan. The Arizona VA Home Jumbo Loan is probably one of the most competitive, if not the most competitive Jumbo loan products that exist on the market today. Most Jumbo loans that are available today require down payments of 20% or higher. However with the Arizona VA Jumbo Home Loan this is not the case. Let’s take a look at an example.

va-loan-advantage

Purchase Price: $750,000 VA Down Payment Requirement: $83,250
That’s a down payment of around 11%* . You might be wondering how I came up with that down payment amount? It’s quite simple really. VA Max Guarantee for Maricopa County is $104,250. Both lender and VA require that the loan be guaranteed by 25%. In this case the $104,250 (VA Guarantee) + $83,250 (Veterans Down Payment) = 25% of $750,000 thus giving you an insured VA Jumbo Home Loan. I can assure you that you will not find a lower down payment out there when it comes to a non-VA Jumbo Home Loan. So if you are in the market for your dream home and never considered using your VA Jumbo Home Loan, it’s time to reconsider. Feel free to call or email to see if this product is the right fit for you.
*This summary is based on a $666,750 loan amount, on a loan term of 360 months, with an interest rate of 4.25% and an annual percentage rate of 4.250%.

To see if you are qualified for your Arizona VA Jumbo Home Loan call me today at 480-538-4980!

THE 2 DOCUMENTS YOU MUST HAVE ON AN AZ VA HOME LOAN

Many Veterans know that serving honorably in the military offers benefits of different varieties. However, what a lot of veterans do not know is how to take advantage of them, or even where to start. The VA Home Loan is no exception to this. So if a veteran is interested in obtaining a VA Home Loan, where exactly do they start? The first order of business that you need to do is get a copy of your DD-214 ( discharge paperwork) or a statement of service if active duty. This document is absolutely critical to have. Simply stated if you don’t have your DD-214 or statement of service you will not be able to obtain a VA Home Loan, reason being, it tells the lender that you were honorably discharged or have served the required amount of time to be eligible for your VA Home Loan benefits.

va-loan-advantage

Now that we have the DD-214 we need to take care of our next order of business and that is our COE (Certificate of Eligibility). This particular document creates much confusion for veterans because they don’t know where to obtain it. The COE is a document that is generated from the VA which states that you are eligible, not prequalified, for the VA loan. To ensure that you are in fact prequalified to use your VA Home loan you must speak with a VA lender to ensure that you meet the credit, and income requirements. Now in order to obtain this document you can contact the VA directly, or you can obtain from a VA direct endorsed lender (somebody like myself) which can be obtained in a matter of minutes.

Lastly, please keep in mind you must have these 2 documents. If you don’t simply stated you will not be able to obtain your VA Home Loan. For more information regarding your VA Home Loan benefits you may call me direct at 480-538-4980.

Thank you and May God bless you for your service to our great country.

Semper Fidelis, Jimmy Vercellino


The Arizona VA Jumbo Home Loan..Yes, it’s True!

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The Arizona VA Jumbo Home Loan.
Many veterans do not understand all of the benefits that exist when it comes to their Arizona VA Jumbo Home Loan. Truth be told, many lenders don’t either… so if lenders are confused, how then do we expect our veterans to know. Sadly, many don’t. This statement cannot hold more truth when it comes to the Arizona VA Jumbo Home Loan. The Arizona VA Home Jumbo Loan is probably one of the most competitive, if not the most competitive Jumbo loan products that exist on the market today. Most Jumbo loans that are available today require down payments of 20% or higher. However with the Arizona VA Jumbo Home Loan this is not the case. Let’s take a look at an example.

va-loan-advantage

Purchase Price: $750,000 VA Down Payment Requirement: $83,250
That’s a down payment of around 11%* . You might be wondering how I came up with that down payment amount? It’s quite simple really. VA Max Guarantee for Maricopa County is $104,250. Both lender and VA require that the loan be guaranteed by 25%. In this case the $104,250 (VA Guarantee) + $83,250 (Veterans Down Payment) = 25% of $750,000 thus giving you an insured VA Jumbo Home Loan. I can assure you that you will not find a lower down payment out there when it comes to a non-VA Jumbo Home Loan. So if you are in the market for your dream home and never considered using your VA Jumbo Home Loan, it’s time to reconsider. Feel free to call or email to see if this product is the right fit for you.
*This summary is based on a $666,750 loan amount, on a loan term of 360 months, with an interest rate of 4.25% and an annual percentage rate of 4.250%.

To see if you are qualified for your Arizona VA Jumbo Home Loan call me today at 480-538-4980!

Thank you and May God Bless you for your Service to our Great Country.
Semper Fidelis, Jimmy Vercellino