VA home loan new Jumbo limit now at $729,750 for Purchase transactions high cost areas! One of the exciting provisions of The Housing and Economic Recovery Act of 2008 was the increase in the VA home loan guarantee in certain high costs areas. Up until now the VA loan amount has been capped at $417,000 in the lower 48 states for 100% financing ($625,500 for Hawaii and Alaska).

With this new bill the VA guarantee has been increased to a maximum of $729,750 with no down payment required in specific high cost areas ($1,094,625. for Hawaii and Alaska). A down payment of 25% will be required on the difference of any loan amount above the VA guarantee, either $729,750 or $417,000 depending on your area.

VA Home Loans over $417,000 for Purchase transactions in normal cost areas. It is now possible through VA to get a home loan above and beyond the current conforming limit of $417,000 in normal cost of living areas. However, a 25% down payment is required on the difference. For example, if a qualified veteran borrower purchases a house for $600,000 the minimum required down payment would be calculated as such:

$600,000 (Purchase Price) minus the $417,000 (maximum 100% limit) = $183,000 2. 25% of $183,000 is $45,750, or just 7.6% of the purchase price

What are the benefits of a VA Jumbo loan

1. No punitive interest rate increase under VA Jumbo loans under $1,000,000. Unlike conventional and FHA jumbo loans that can carry up to a full 1% increase or more; this can save you thousands of dollars.

2. No monthly mortgage insurance premiums (PMI) which are required on most mortgages without a 20% down payment which will save you hundreds of dollars per year.

3. Little to no down payment required, so you can keep more money in the bank.

4. VA Jumbo loans do not require perfect credit.

Author: Josh Klenda
Article Source: EzineArticles.com
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