Unlike conventional jumbo loans, VA jumbo loans don’t have predetermined loan limits. They are limited only by your qualifications and your entitlement, allowing you to borrow more when purchasing a home.
Fortunately, loans offered by the Department of Veterans Affairs (called VA loans) come with added benefits. How does no pre-payment penalties sound? Individuals who qualify for VA jumbo loans don’t have to worry about private mortgage insurance (PMI), either.
One of the biggest differences between non-VA and VA jumbo home loans is interest rates. While jumbo loans generally have higher interest rates than a loan that falls within the conforming loan limits, VA jumbo loans tend to have the same interest rates as regular VA loans, although this will depend on the lender.
Eligibility
So who is eligible for VA jumbo loans? First you’ll need to meet all the eligibility requirements for standard VA loans, meaning you’ll need to be a service member, veteran, or surviving spouse of a service member or veteran.
If you’re entitled to use the VA Home Loan Benefit, your APM loan officer can help you get all the paperwork you need to get started.
It’s important to remember that the home you’re purchasing must be your primary residence if you’re looking to use your VA home loan benefit. The home will also have to pass standard inspections, which may include a VA loan termite inspection.
Qualifications
Do you have your eligibility covered? Great! Thank you (and your loved ones) for your service. Here are some important qualifications for VA jumbo loans to take note of.
Credit score requirements
VA jumbo loan requirements can be slightly stricter than lower-balance VA loans. Credit score requirements, for example, can be higher (but will vary slightly by lender). For higher balance loans, the FICO credit score requirement can be as high as 720, as compared to around 580 for a lower-balance VA loan.
Down payment
Standard VA loans are famous for not having down payment requirements. Jumbo VA loans can offer the same benefit…in some cases.
It all comes down to your remaining entitlement. Entitlement is how much a borrower has available for guaranty on a home loan. Your APM loan officer can help you determine what your entitlement is.
If you’re already using your home loan benefit, you may not have full entitlement. This applies only to those who have active VA loans, a foreclosure, or have sold their home as a short sale.
If you’ve paid off your VA loan in full or sold the property that carried the VA loan, then you should still qualify for your full entitlement. If there is still a balance, or if you’ve allowed a buyer to assume your VA loan, then you’ll be able to use the balance of your unused entitlement.
Debt-to-income ratio
The maximum debt-to-income (DTI) ratio for VA jumbo loans is 50%. This means that your total monthly debts—including your VA jumbo loan mortgage payments, along with all your other bills—cannot exceed 50% of your pre-tax monthly income.
Getting Started
Ready to take your curiosity about VA jumbo loans a step further? APM is here whether you’re just looking for more information or are ready to get started on a VA jumbo loan, so give us a call anytime.
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