VA Jumbo Loans Compared to Regular Jumbo Loans -

A VA approved Lender; MortgageOne, Inc - NMLS #898812. Not affiliated with the Dept. of Veterans Affairs or any government.

VA Jumbo Loans Compared to Regular Jumbo Loans

02-08-2022 • MHS Lending

When you make the decision to buy a home, you are likely committing to the most expensive purchase you’ve made to date and it’s important that you feel confident about your decision. While saving up for a significant down payment can be overwhelming and it may feel like you can’t ever afford the home of your dreams, there are options out there to help.

What is a jumbo loan?

A jumbo loan is a mortgage used to finance properties that are too expensive for a conventional conforming loan. Depending on where the house is located there is a maximum amount for a loan and homes that exceed that limit require a jumbo loan. While the standard limit for 2022 is $647,200 (in most counties), this can vary greatly depending on where you would like to live and that is why the jumbo loan exists.

What are the differences between regular jumbo loans and VA Jumbo Loans?

While both the regular jumbo loan and the VA Jumbo Loan are designed to help you afford a more expensive home, there are a few key differences. VA Jumbo Loans are loans that allow military members or veterans the ability to purchase a home that is above the county loan limit (limits based on the location of the property you wish to buy) and they were created to help those who are eligible for VA Loans to access homes in more expensive areas.

With the VA jumbo loan you can reap the benefits of the VA Loan and no down payment or just a fraction of what a traditional down payment would be. If the home is above the county loan limit a down payment may be required, but it won’t be for the entire price of the home. In order for banks and lenders to maintain the 25% guarantee the Department of Veterans Affairs offers, you may be required to put down 25% of the amount that exceeds the limit, but this will be determined by your entitlement.

How do VA Jumbo Loans work?

The best way to explain this is with an example. If a buyer wants a home that is $500,000 but the County Loan Limit is $400,000 the difference is then $100,000. For VA Jumbo Loans this difference is what the down payment is calculated from. VA jumbo loans are ideal for buyers who want to take advantage of hard-earned military benefits and buy a more expensive home for less money up front. With jumbo loans you can reap the benefits of the VA Loan and pay no down payment or just a fraction of what a traditional down payment would be.

One exciting thing to note is that while borrowers used to have to come up with 25% of the $100,000, as of January 21, 2020, this rule changed. Now, any veteran with first tier entitlement who can qualify for the entirety of the loan can get approved for that loan with no down payment requirement!

Lenders that offer VA Jumbo Loans

Since the VA Jumbo Loan is a specialty loan, it’s important that you work with a lender who knows the ins and outs and can expertly navigate the rules and regulations. At MHS Lending, we are proud to work with veterans and military families in their home buying journey and have decades of experience serving those who have served or are actively serving in the US military. If you’re looking to buy the home of your dreams using your hard-earned VA Loan benefits like a $0 down payment and no PMI, give us a call today at 619-728-7620 to get started!