VA Jumbo vs. Conventional Jumbo Mortgage in Texas…
The VA Jumbo loan is often a better option than Conventional Jumbo for veteran borrowers in Texas. Why you ask? First of all just to be clear a Jumbo loan in Texas is a loan amount over $417,000. Under Conventional financing moving into Jumbo loan sizes means your interest rate is moving up to. That is not the the case with VA Jumbo loans! The interest rate is about the same as the conforming VA interest rate.
VA loan rates have historically been up to .50% lower than what you would get in a conventional mortgage!
VA Jumbo home loans are loans from $417,000 to $1,000,000 and require a down payment equal to 25% of the amount over $417,000. If you don’t have full entitlement, the amount of entitlement you have already used must be added to the 25%. The standard VA Funding Fee is required.
The Department of Veterans Affairs does have a funding fee requirement for VA loans. This funding fee can be anywhere between 0.5% to 3.3% of the loan total. However, veterans who were classified as disabled during at least 10% of their time in active duty do not have to pay the fee.
Getting a Conventional Jumbo loan will require great credit and a 20% down payment is most cases. Also with Conventional Jumbo the debit to income restriction will be a max of 45%. However with a VA Jumbo loan the credit does not have to be as stellar and VA allows for a higher debt to income ratio. It is also typically easier to qualify for a VA mortgage loan than a conventional mortgage. This has become especially true with the current downturn in the housing market.
Another big advantage of VA mortgages, in general, is that they do not require any monthly mortgage insurance! Private mortgage insurance (PMI) is generally required on conventional loans when borrowing more than 80% of the value of a property, and the percentage amount varies with the loan-to-value.
VA Jumbo savings vs Conventional Jumbo on down payment is a MAJOR selling point lets look at an example with a purchase price of $650,000:
- Conventional Jumbo Down Payment 20%: $130,000
- VA Jumbo Down Payment 8.92%: $58,250
- SAVINGS OF $71,750.00 !!
Between the tremendous savings and easier terms, any veteran who is in the home-buying process should strongly consider using their hard earned VA benefits. In both the long and short, it simply makes sense. Call me today for more details or to apply for a VA or Conventional loan. Also let’s compare the two and find out what’s best for your situation.