VA Jumbo Mortgages in California
I marked this year's Memorial Day with a weekend full of kids' activities --- my son's t-ball season wrapped up and then there were about a half-dozen birthday parties that followed. Fairly typical, I am told, for parents these days. But quick on the heels of the three-day weekend, I realized the anniversary of D-Day was coming up and that just a couple of years ago I had the good fortune to visit the beaches of Normandy, France. The two occasions together got me thinking about our nation's veterans and how our industry helps them use one of the benefits they justly acquired through their service.
At least here in Marin County, CA, just north of the Golden Gate, we don't see a lot of VA loan scenarios and it's a shame. Because I'm licensed to originate mortgage loans throughout the state of California, I am aware that there are geographical pockets where Veterans Administration (VA) loans are common and I believe that education by real estate agents in all other areas about the VA jumbo loan product could go a long way towards helping those buyers who have served our country find the best home loan for their ideal property in any locale. So perhaps a "True or False" boot camp of sorts is in order and below are several common points of confusion, concern and curiosity about VA jumbo loans.
- VA loans are all zero down. This is FALSE. While in some cases a veteran can obtain 100% financing, they are not required to do so. And in cases where the loan amount would exceed the county loan limit, there is a formula we use to determine the minimum required down payment. Yesterday, in fact, I priced a jumbo loan scenario for the purchase of a home worth $2.1MM. The vet would have needed to make a down payment of about $350K, but still less than 20%.
- VA loan limits are the same as FHA. This is TRUE, but a bit of a trick question. The loan limits for one- to four-unit homes in any metropolitan statistical area (MSA) do mirror the conventional and FHA limits, however, a veteran can exceed these amounts if making a down payment (where he or she might otherwise have looked to obtain 100% financing). You can look up the loan limit in your area HERE.
- VA loans require a pest inspection. TRUE story, here in California. And this is the one that causes the most reluctance among listing agents in my neck of the woods. But think about this for a minute. Many buyers in our market are forced to waive the inspection contingency already. And many sellers preemptively order inspections. If the termite report is clean, what are you worried about?
- VA loans have PMI (mortgage insurance). Somewhat TRUE but mostly FALSE. VA loans may have an upfront funding fee (FF), but this is sometimes waived if the veteran has a service-related disability. But more importantly, no VA loans have monthly mortgage insurance. This is a big departure from an FHA loan, for example, and much to the benefit of the veteran.
- VA loans have great rates. VERY TRUE. When we're talking 30-year fixed jumbo rates, it's tough to beat a VA loan.
So if you're a veteran, thank you! And know that a VA jumbo mortgage is an option you should explore. This time around, we're here to serve you.
And real estate professionals, if you entertain a VA offer --- especially a jumbo VA mortgage --- call me if you have any concerns about its strength and viability and even if I am not party to the transaction. We'd love to see a vet get the home and we'd hate to think they don't get fair consideration out of a misunderstanding of this wonderfully advantageous program.
Robert J. Spinosa
Vice President of Mortgage Lending
Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709
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