Understanding the Ins and Outs of Jumbo VA Loans
Before applying for a Jumbo VA loan, it is important that you understand the ins and outs of it. Not everyone is eligible to apply for a Jumbo VA loan and the facility can be used only for a specific purpose. Thus in this article we have decided to explain the alpha and omega bout the Jumbo VA loan. The first question that strikes our mind is about the eligibility. After finding out who can apply for the loan and under what circumstances, you must understand various aspects of it, like the down payment and restrictions on usage of loan amount. So we have decided to lay down the entire picture in below points.
1. Who can apply for a Jumbo VA loan?
A veteran of military or reserves or National Guard can apply for the Jumbo VA loan. Additionally, spouse of the personnel who served under the military are also eligible for the application, provided their husband lost their life and the spouse has not remarried or separated from the husband. The Veterans Affairs also considers the time period for which the veteran has served for the country. For example, the veteran must have served in the military for at least 181 days or more. For the employees with service in National Guard or reserves, this period is defined to be of about 6 years. The eligibility period for personnel serving in war time is kept around 91 days. Thus the first thing you need to find out is if you are eligible for the loan. After which you can get your documents ready and start the application process.
2. Fees and down payment amount
In most counties the loan amount greater than $453,100 is regarded as a Jumbo VA loan. In such case the borrower has to pay a funding fee on amount greater than $453,100 till $1,000,000. The fee depends on the down payment amount as well. With more down payment amount the funding fee becomes less. In general the lenders expect a down payment of around twenty five percent on loan amount greater than $453,100. That said it is not a rule of thumb. If the counties have a very high property price, the down payment amount is usually expected to be lower.
3. Rates of interest and credit background
Jumbo VA loans are available as an option to veterans even when the credit history of the veteran is poor. If the veteran is working a job from around a year, the lenders are more likely to be at ease while approving the loan. Though the poor credit scores don’t become a hindrance in the Jumbo VA loan, the interest rates around the loan is slightly dependent on the same. Lenders expect a credit score of above 620. This is helpful for getting loans at nominal interest rates.
4. Using a Jumbo VA loan
While the Department of VA helps arranging the Jumbo VA loan for veterans liaising with different lending companies, it also specifically defines the purpose for which the loan amount can be used. A Jumbo VA Loan can only be used to have the dream primary home for a veteran. The amount cannot be used for buying any other property or a vacation home. It’s thus different from other personal or traditional loans available.
Conclusion
Many veterans have hesitation and a lack of information about above points. In addition to above, the Department of VA has appointed some counselors to further assist the veterans to deal with any complicated situations. The Jumbo VA loan should be used to fullest of its advantage.
