A VA loan was designed to offer long-term financing to eligible American veterans or their surviving spouses, provided they haven't remarried.
The most attractive benefit of a VA loan is an option to finance 100% of the home purchase, however, most would be home buyers don't realize that you can purchase an upsale home with a very small down payment relative to jumbo mortgage requirements. VA has an unique way of calculating the down payment for a purchase price that exceeds the conventional lending limit of $424,000 (may be more in high value real estate markets). Jumbo mortgages typically require a mimimum 10% down payment, so for example if you purchase a home for $500,000, the down payment requirement is $50,000 while the minimum down payment for a VA mortgage is $19,000. Not only are the down payment requirements attractive, the interest rate will typically be .25 - .50% better to boot.
While you will pay a VA funding fee (2.15 - 3.25% of the loan amount), which can be financed into the mortgage, you will not pay the monthly mortgage insurance typically charged for conventional and jumbo mortgage loans. The VA funding fee may be waived for disabled veterans.
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