The VA home loan is without peer when it comes to providing a competitive mortgage option with as little cash to close as possible. VA loans don’t require a down payment while at the same time restricting certain types of closing costs from payment by the veteran. In addition to no down payment and low closing costs, there is no monthly mortgage insurance premium, boosting the borrower’s buying power. In most VA transactions, the maximum loan amount is the same as conventional limits which for 2018 is $453,100 in a zero down purchase. In areas that are deemed “high cost” the maximum VA home loan limit for a zero down purchase matches the conventional limit of $721,050. But there is another option not available through most lenders that I’d like to share with you that allow those eligible for a VA home loan to finance a much larger purchase, the VA Plus JumboXL.
This special program can be used for a rate and term refinance in addition to being used to buy and finance a higher end home. The maximum loan amount for this product is $2,500,000, much higher than the so-called “high cost” jumbo VA loan. Designed for a single family home, the JumboXL loan requires minimum credit score of 740 and a maximum debt-to-income ratio of 43. The standard suggested debt ratio for a regular VA loan is 41. The loan application for the JumboXL is processed much like any other loan product as income, employment, assets and credit will be reviewed.
Once the application is submitted, we run the application through an automated underwriting system for an electronic approval. The approval will list the items needed in order to complete the process and order closing papers. For all JumboXL applications, two years of income tax transcripts will be required, regardless if the borrower self-employed or not.
There is also another option for those seeking to refinance a loan while taking cash out that allows for higher loan limits. The cash out refinance VA Plus loan limit is $1,500,000 with a loan-to-value limit of 90 percent.
When veterans begin their search to finance a higher end home they may think the VA loan program is only good for conforming loan amounts but that’s not the case. I have more options available to meet your needs providing competitive rates, low costs and a quick process. Whether your loan requirements are $100,000 or $1,000,000 or even $2,500,000, let’s talk about how your VA entitlement can help you buy the home of your dreams.