VA loans may actually be the best home loan in the USA! Heck, even the world possibly! Although most VA loans are used for a no down payment purchase, it is also a very beneficial solution to buy a higher priced home. Each county in the U.S. has a VA loan limit. The good news is that VA will still offer this great loan while exceeding these county limits. This is called a VA jumbo loan. On these loans, a VA jumbo loan down payment is required and must be calculated. So let’s discuss the benefits of a VA jumbo loan and a little known trick for obtaining the down payment.
VA Jumbo Loan Down Payment Option
A VA jumbo loan is tough to beat for qualifying buyers in the luxury home market! The Veteran’s Administration follows the Fannie Mae conforming loan size limits for each county. So just like conforming loans, when the limit is exceeded it goes into the jumbo arena. Although, VA jumbo loans are different and it is more complicated for the buyer to figure a down payment. The good thing is a seasoned VA loan officer is able to determine down payments using a formula specified by VA. There are several wonderful benefits of these loans for Veteran’s, service members, or qualified surviving spouses.
Potential VA Jumbo Benefits
- Up to $1,000,000 loan amount allowed
- No monthly PMI – Keeps payment lower in comparison to other low down payment jumbo loans
- Often lower down payment than traditional jumbo loans
- May be more flexible on credit & debt ratios than traditional jumbo loans
- Liberal seller paid costs and concessions.
But there is one more potential benefit of a VA jumbo loan that most do not know! VA jumbo loans require a down payment. Although, it could be a small percentage down. The down payment depends on the borrower’s available entitlement and purchase price of the new home. Good News! VA will allow for another source to cover all or a portion of the down payment. This amount could actually cover up to 4% of the sales price. Imagine if your VA purchase required a 3% down payment, then this solution could cover it for you. Additionally, the seller could pay all of the buyer’s customary closing costs. How about that for some benefits?
Lacking a VA loan down payment? Call us for a possible solution!
Ideas for VA Jumbo Loan Down Payment
There are a lot of ways to come up with down payment and a VA jumbo loan down payment is no different. A few ideas include the following:
- Of course, checking and savings accounts
- Borrow against an asset such as a car, CD, retirement account
- Sale of another home
- Home equity line of credit advance on another property
- Gift funds
- Income bonuses or commissions
As you have probably heard, buying a home may be your biggest financial decision of your life. So contact us for the right solution to match your needs and goals!