Facebook Twitter Instagram
    Mortgage.info
    • First Time Homebuyer
    • Loan Programs
    • VA Programs
    • Refinancing
    • Beyond the Mortgage
    Mortgage.info
    Home»VA Loans»VA Jumbo Loan: What is it and How Does it Work?
    VA Loans

    VA Jumbo Loan: What is it and How Does it Work?

    Mortgage.infoBy Mortgage.infoApril 1, 2019No Comments3 Mins Read
    Facebook Twitter Pinterest LinkedIn Tumblr Email
    Share
    Facebook Twitter LinkedIn Pinterest Email

    VA loans typically offer 100% financing, but there’s a limit to it. If you borrow more than the standard limit of $484,350, you may be looking at a VA jumbo loan.

    Compare Offers from Several Mortgage Lenders.

    While the name sounds scary, it isn’t anything to be alarmed about. You still get the flexible underwriting guidelines, you just have a few other stipulations you must meet in order to get approved.

    A Down Payment is Necessary

    The first difference that will likely have the largest impact on you is the need for a down payment. The VA guarantees up to $484,350 for veterans. If you need to borrow more than that, you will need to make a down payment.

    The down payment you must make is equal to 25% of the difference between the purchase price of the home and the guaranty that you have available. Let’s assume, in this case, that you have full entitlement. This means the VA will guaranty a loan up to $484,350 for you. If you find a home for $550,000, you need a jumbo loan.

    Your down payment is equal to 25% of the difference between $550,000 and $484,350. So in this case, you would need $16,412 down on the home. While this sounds like a lot, it’s only a 3% down payment on the purchase price of the home. You would have a hard time finding any other loan that would allow you to put down as little as 3% on a jumbo loan.

    Click to See the Latest Mortgage Rates.

    Compensating Factors May be Necessary

    You may also need compensating factors to make up for the risk that a jumbo loan poses. If you are familiar with the VA loan, you know they have relaxed guidelines already. Typically, all you need is a 620 credit score, 41% debt ratio, and stable income/employment.

    With a jumbo loan, though, lenders may require a higher credit score (closer to the 700s), a lower debt ratio, and maybe even some reserves on hand (assets). Typically, you don’t have to verify assets to qualify for a VA loan, but with a jumbo loan, it’s pretty typical.

    Because each lender can have their own rules and make their own lending choices, some may have higher requirements than others. While a high credit score may seem like a great compensating factor to one lender, another lender may require a high credit score and 6 months of reserves on hand.

    Everything Else is the Same

    Aside from the loan amount and the minor changes in the requirements that lenders may require, everything else remains the same. The VA still guarantees the loan up to the amount of the entitlement that you have.

    You still go about the same process when you apply for the loan. The main difference, in this case, would be that you probably need to bring money to the closing. While at a standard VA loan closing you need money for the closing costs, at a VA jumbo loan closing, you need money for the down payment and the closing costs.

    As long as you know that you can afford the higher payment, the VA loan can be a great way to get the jumbo loan that you need. With a small down payment compared to other loan programs and flexible underwriting guidelines, you stand to earn the most with this loan program as long as you can find a willing lender.

    Click Here to Get Matched With a Lender.

    Mortgage.info
    + posts

    Mortgage.info is your information portal for all things home, mortgage, and refinancing.

    • Mortgage.info
      https://mortgage.info/author/mortgage-info/
      The 4 Questions You MUST Ask Before Hiring a Real Estate Agent!
    • Mortgage.info
      https://mortgage.info/author/mortgage-info/
      ARM Loans: What is a Fully Indexed Interest Rate?
    • Mortgage.info
      https://mortgage.info/author/mortgage-info/
      How To Choose the Best HELOC Lender
    • Mortgage.info
      https://mortgage.info/author/mortgage-info/
      How to Get the Best Deal on Your First Home: Tips and Tricks that Work!
    va high cost counties va jumbo home loans va loan amount va loan limits
    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    Mortgage.info

    Mortgage.info is your information portal for all things home, mortgage, and refinancing.

    Related Posts

    Using a VA Loan for a Condo Purchase

    January 12, 2022

    Buying a House in 2021 with a 100% VA Home Loan

    March 9, 2021

    Buying a Condo with a VA Loan

    March 2, 2021
    Mortgage.info
    © 2023 Mortgage.info Designed by ThemeSphere.

    Type above and press Enter to search. Press Esc to cancel.