VA Jumbo Loans
In 2017, the VA limit in Texas is $424,100. In some areas, median home prices have risen above these limits. In many cases, home buyers can find a suitable property without exceeding the limits. But that’s not always possible. And this is where VA Jumbo loans come into the picture. By making a down payment, eligible borrowers are often able to qualify for a VA-guaranteed mortgage loan that exceeds loan limits.
How much can I afford with VA?
How much can I afford with VA?
The General Rule for Down Payments: According to the U.S. Department of Veterans Affairs website: “The loan limits are the amount a qualified Veteran with full entitlement may be able to borrow without making a down payment.” The key part of that sentence is “without making a down payment.” This means you could potentially exceed the limit for your county, as long as you are willing to bring some money into the deal. How much money will partly depend on how far above the limit you need to go.
Home buyers who use VA jumbo loans in Texas generally have to make a down payment of 25% of the difference between the loan limit and the purchase price. For example, let’s assume a VA-eligible home buyer wants to purchase a house for $500,000. The property is located in Texas where the loan limit is currently set at $424,100. In this scenario, the difference between the loan limit and the purchase price is $75,900
.
Again, the general rule for VA jumbo loans is that borrowers must make a down payment equaling 25% of the difference. So in this case it would equal a down payment of $18,975 (because .25 x 75,900 = 18,975). That’s less than what the down payment would probably end up being for a conventional home loan. So even though a down payment is usually required for a VA jumbo loan that goes above the county limits, there are still benefits to using the program.
How VA Jumbo loan Max Loan Limits Help Provide a Second Jumbo Mortgage Option
The good news for people looking to buy property in high-cost areas in Texas is that there is now a VA alternative to traditional jumbo mortgage lending. This is because VA max loan limits currently stand at $1,000,000.
Advantages of VA Jumbo Loans
When it comes to VA vs conventional financing, the benefits are simple. Even borrowers with strong financials can take advantage of lower down payment opportunities. At the same time, people with poor credit in high-cost areas, benefit from a reduced potential for them to be priced out of their local communities.