What Exactly Is A VA Jumbo Mortgage? In This Current Period, Do You Still Need This Type Of Mortgage to Buy a Higher-Priced Home?

You’ve probably heard by now that the VA county mortgage loan limits are no longer in force as of January 2020. But you may still hear the terms “VA Jumbo home mortgage” or “jumbo VA home loan.” If there are no more VA loan limits, why would loans still use the “jumbo” word? The difference refers to Federal Housing Finance Agency (FHFA) conforming loan limits. These limits are the source of the terms “conforming” and “non-conforming” loan and “jumbo” loan. A jumbo home mortgage is any mortgage larger than the FHFA loan limits. Along with the financial limits, “conforming” loans also have underwriting guidelines from the government-sponsored agencies that buy the loans: Freddie Mac and Fannie Mae. 

What is a VA jumbo home mortgage? 

Even though you can get any size VA home mortgage that you can qualify for, VA jumbo mortgages will exceed the FHFA county conforming loan limits. 

In many counties, the FHFA conforming loan limit is $484,350 for a single-family home mortgage. In higher housing price counties, the conforming loan limit is $726,525 for a single-family home loan. These limits also increase depending on the number of units in a property. In a high housing-priced county, the conforming loan limit for a 4-unit property maxes out at $1,397,400.

A VA jumbo mortgage exceeds any of these amounts, varying depending on the county where you want to buy. You may still be eligible for a no-money-down VA loan. Your funding fee on a VA jumbo home mortgage may also vary depending on your lender and their policies.

You can still get a VA mortgage at less than the FHFA conforming loan limits with no money down, and you can still roll your funding fee into the VA mortgage.

Some requirements for a VA jumbo home mortgage will differ between lenders. Although you may need to make a down payment for a jumbo VA home loan, it’s calculated as a percentage of the difference between the county conforming loan limit on the property you want to buy and your total mortgage amount. 

A VA jumbo home mortgage could help you to buy the home you need and it can help you to ensure you and your family’s financial security. Talk with a knowledgeable, trained VA mortgage specialist to learn what your options are in a 30-year fixed rate VA jumbo home mortgage or other loan terms and options.

Sources

All the prior VA loan information … this is trying to explain the situation in common terms a Vet will understand

 

https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Maximum-Conforming-Loan-Limits-for-2019.aspx

Are You a Veteran? Well, Today Is Your Lucky Day! You Can Now Afford Any Home You Are Qualified For In The Golden State

Veterans have some amazing financial news as a New Year’s gift: the long-standing county VA loan limits will be completely lifted. A qualified veteran can now borrow as large a VA home mortgage as they can afford and need without worrying about loan limits. The current VA mortgage cap of $726,525 for high housing price counties will no longer be in effect.

Can I buy a multi-million dollar home with a VA mortgage?

After January 1, 2020, yes! You can apply for and receive a VA mortgage of more than $726,525 up to $2 million, $3 million, $5 million or more.

Will I need to pay a down payment?

The VA is not requiring lenders to cap the amount of mortgages they issue with zero money down. You may not need to pay a down payment for the new VA home mortgages that will be issued without the VA county loan limits. However, in some areas and with some lenders, you may need to pay a down payment that will be calculated by a formula using the difference between the mortgage amount and the county FHA loan limit. In general, this type of down payment is limited to no more than 25 percent of the difference between your home’s purchase price and the FHA loan limit.

Is the VA funding fee going up?

Yes — for a short period — and the amount will vary depending on your entitlement status and how many times you’ve used your VA home loan benefit. If you’re a first-time VA home buyer, your funding fee will be 2.35 percent. The current first-time funding fee is 2.15 percent for regular military. 

The funding fee for a subsequent use of the VA loan benefit will be 3.6 percent of your loan amount. This is an increase from the current 3.3 percent rate.

Can I roll the funding fee into my VA loan?

This depends on your situation.  Check with an independent mortgage broker such as California Platinum Loans on how you can qualify to roll your VA funding fee into your VA home mortgage. 

Overall, the new change in guidelines or some like to call it change in VA Law,  for VA loans is fantastic news for veterans. You can now buy the home you want and can qualify for using your VA mortgage benefit. It’s worthwhile to check your options for your new, larger VA home loan with a qualified VA home mortgage expert.

 

Sources

https://www.nerdwallet.com/blog/mortgages/va-home-loan-limit-and-funding-fee-changes-2020/

 

plus the VA mortgage Powerpoint presentation

Given The Status Of the Fed’s Current Interest Rate at 0%, Is Now The Best Time to Refinance Your Mortgage?

Federal Rate 0%

Since the Federal Reserve cut its prime interest rate to zero in mid-March 2020, many onlookers thought that mortgage interest rates would drop. That hasn’t happened. With a few exceptions such as VA 30-year fixed-rate mortgages, nearly all mortgage interest rates increased. New mortgages for home purchases and refinances are all affected. The average rate of increase within the first few days after the Fed’s unprecedented announcement was 29 basis points (.29%) according to MarketWatch.

Why are rates increasing instead of decreasing?

Fears over people’s ability to pay their mortgage at all are the likely reason for short-term percentage rate increases. VA mortgage interest rates may have decreased slightly because most, if not all, reservists are either called up or have been notified to be prepared to return to service as a result of the COVID-19 pandemic. The VA home loan guaranty may be encouraging lenders to reduce interest rates slightly in response to the current crisis.

Other lenders and programs are seeing interest rate increases for a variety of reasons. Most financial advisers are saying that so much is uncertain in the current COVID-19 pandemic and crisis that it’s probably impossible to predict whether rates will increase or decrease in the weeks to come.

Other news impacting mortgage rates

The Internal Revenue Service has announced that taxpayers can defer tax payments until July 15, although tax returns must be filed by the April 15 deadline. Those who are self-employed, including people who own and lease property, will need to continue to make quarterly estimated payments, however.

Property sales will likely be impacted by the uncertainty in tax filing rules. The IRS is still considering whether to extend the April 15 tax filing deadline in general for individual and corporate taxpayers.

In the short-term, home mortgage rates have increased. Good news may be on the horizon, however, in the form of lower rates for refinancing and home purchase after the COVID-19 crisis begins to be resolved.

 

Sources

https://www.marketwatch.com/story/mortgage-rates-surge-to-highest-level-since-january-even-though-the-fed-just-brought-interest-rates-to-0-heres-why-2020-03-19

https://www.marketwatch.com/story/the-irs-postponed-tax-payments-but-you-still-have-to-file-your-1040-by-april-15-for-now-2020-03-19?itm_source=parsely-api&mod=mw_more_headlines