Buying your dream home doesn’t have to be difficult as a veteran of the United States. You’ve sacrificed during your entire career for our glorious country and deserve to retire with security. And your family deserves to return to a beautiful house they can call home if you’re still serving and need a space away from the base.
Our team can help make that happen with a VA Jumbo Loan, a home loan from Veterans Affairs. The government legislated it for eligible veterans like yourself, who want to spend extra on a home they’ll enjoy forever. They let you and active-duty servicemen and women exceed the normal VA Loan Limits to buy a higher-end home.
What is a VA Jumbo Loan?
Similar to a regular VA Home Loan, it is a home finance option available for military personell that the VA backs. The difference is that a VA Jumbo Loan covers an amount that exceeds the conventional loan limit. These home loans are known as non-conforming loans and are one of many different types of VA loans.
For example, the VA Loan Limit for Arizona and many national counties in 2022 is $647,200 for a single-unit home. You can also check out the government’s latest datasheet for conforming loan limits in your particular area.
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.
We recommend working with a qualified VA lender to become eligible for a VA Jumbo loan and purchase a luxurious retirement or temporary home.
Do VA Jumbo Loans Require a Down Payment?
The rule of thumb for jumbo loan down payments with other home loans is that you’ll pay at least 20%. And these also come with higher interest rates that drive your lifetime mortgage price much higher. The great news is that your home loan benefit for VA Jumbo Loans means the lender doesn’t require anything.
While they won’t ask you to make a down payment, you must pay the VA Funding Fee, which is a one-time fee to Veterans Affairs. It costs 2.3% of the total loan amount but runs less than a down payment in most cases.
For example, you would pay $18,400 as a funding fee for an $800,000 home loan. This alternative to traditional down payments would save you and your partner $141,6000. VA Jumbo Loans not only give you a higher mortgage amount than expected, but they can also save you hundreds of thousands of dollars.
Jumbo Loans vs. Conventional Loans
Jumbo loans are loans that are for an amount that is higher than the conventional loan amounts, which are up to $647,200 in most of the U.S. and $970,800 in high–cost areas in 2022. 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.
How Can I 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.
From closing costs to monthly mortgage payments, we know it feels like the lists of costs are endless. But these don’t disqualify you from buying an expensive home as long as you rely on the VA’s backing.
You can get a VA jumbo loan of up to $2 million, assuming you meet the minimum credit score requirements and have full entitlement through the VA.
We advise our servicemen and women to obtain a Certificate of Eligibility before getting a VA Jumbo Loan. A lender cannot start the process without this necessary document. If you don’t have it already, our team can get it on your behalf, saving you from the hassle.
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 typically $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.
What are the Benefits of VA Jumbo Loans
VA Jumbo Loans have tons of benefits that differentiate them from the typical home loan options. No down payment requirement is a big one and is also true for standard VA Loans. Purchasing a home with this advantage is only possible through the VA as an eligible military member.
Another benefit of utilizing a Jumbo VA Loan is that you won’t need private mortgage insurance. Most homebuyers that put down less than 10% need this in case of loan default. However, your experienced VA lender trusts Veterans Affairs and their guarantee on the loan, so that you can avoid this fee.
VA Jumbo Loan Requirements
While any active-duty military personnel, veteran, or surviving spouse can obtain a VA Jumbo Loan, the VA has individual finance and credit score requirements. Lenders will still review your credit report and check your debt-to-income ratio (DTI), current income, and other figures.
Qualifying for a home loan, especially if you’ve served in the military, is personal. You should talk to a personalized VA lender that can give you tailored advice on whether you can proceed.
Am I Eligible for a VA Jumbo Loan?
The VA asks that you become eligible for a regular VA Home Loan and meet lender-specific in order to move forward with a VA Jumbo Loan. We can help you and your partner work through the process of obtaining a VA home loan.
It’s a journey that thousands of other home buyers have gone through with us and ended up in their dream homes.
Still have questions or want to know more about how to get a VA jumbo loan? You can contact Jimmy Vercellino directly by calling 602-908-5849. Another team member will connect you to him as soon as possible if he’s serving other clients.