Category Archive: FL VA Jumbo loan

VA Jumbo Loans: Just the Facts

Mortgage loans guaranteed through the Department of Veterans Affairs (VA) are an important benefit for many service members and veterans. VA loans, such as VA jumbo mortgages, are extremely flexible, allowing eligible people to obtain mortgages at highly competitive interest rates, no down payment, and no private mortgage insurance (PMI).

VA loan limits

Many qualified military borrowers can get confused by the loan limits for VA mortgages. In fact, there’s no maximum loan amount established by the VA. There are, however, limits to how much a qualified buyer can borrow without making a down payment. Originally, that limit was four times a veteran’s entitlement, which is currently $36,000, for a total of $144,000.

However, the VA abandoned that formula and set the maximum VA loan amount to match the loan limits set by government-sponsored entities Fannie Mae and Freddie Mac. That limit is $417,000 in most counties in the United States, with higher limits in some “high-cost areas.” In Florida, those high-cost areas are Collier County (limit $448,500) and Monroe County (limit $529,000).

Enter VA jumbo loans

What happens if you want to buy a more expensive home than the limit for your county? Are you out of luck? No. Remember, the VA has no maximum loan amount. The “limits” apply only to how much you can borrow without a down payment. So, if you want to buy a larger home, you can. You’ll just need a down payment.

Loans above the loan limits are called jumbo loans, and the VA has a formula for calculating how much down payment you’ll need. It’s 25 percent of the difference between your loan limit and the purchase price of the home you want to buy.

For example, if you live in Brevard County, where the limit is $417,000, and you want to buy a home that costs $517,000, you have to subtract your limit from the price ($517,000 – $417,000 = $100,000). Your down payment will need to be 25 percent of that difference, or $25,000 ($100,000 x 0.25 = $25,000).

We can help

There are other rules that apply to VA jumbo loans. For example, if you’ve used some of your loan entitlement already, and it can’t be restored right now, those numbers will change. At Embrace Home Loans, we’re experts in VA lending. We’ll work with you to help you understand VA jumbo mortgages and get you the loan you need. Call us today at 407-733-6425.

Jumbo Mortgage Guidelines for 2016

Jumbo mortgage loans are loans that are larger than the conforming loan limits set by Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac are both government-sponsored enterprises (GSE) that provide stability and affordability to the mortgage market by buying loans from mortgage lenders. That allows the lenders to issue more mortgages to other borrowers.

However, these GSEs are restricted by law to purchasing mortgages below a specific amount, which is the conforming loan limit. The conforming loan limit can change each year. For 2016, the limit is $417,000 in most of the United States, except for a few areas where housing costs are higher than average. In Florida, the conforming loan limit is $529,000 in Monroe County, and $448,500 in Collier County, and $417,000 for all other counties.

Going big

If you’re buying a home that costs more than the conforming loan limit in your area, you’ll need a jumbo loan. Guidelines for jumbo loans can also change from year to year, but currently, the maximum value for a jumbo loan is $8 million.

Of course, lenders that extend jumbo mortgages typically have some requirements that borrowers must meet, such as:

  • A down payment. Lenders used to require at least a 20 percent down payment, or have at least 20 percent of your home’s value in equity if you’re refinancing. Some lenders may allow down payments of less, in exchange for higher interest rates.
  • Thoroughly documented income. In general, you can expect to document at least two years’ of steady income.
  • High credit scores. Generally, you’ll need at least a 680 score for most jumbo loans, but the higher your score, the better rates you’ll be able to find.
  • A low debt-to-income ratio. Often, jumbo loans will restrict borrowers to a specific DTI. The Consumer Financial Protection Bureau requires the majority of jumbo mortgages to be “qualified” by specific standards. For a qualified jumbo mortgage, a borrower’s DTI can’t exceed 43 percent, meaning the monthly house payment can’t be more than 43 percent of the borrower’s pretax income.

Flexibility

Even with those general requirements, jumbo mortgages in Florida can offer a significant amount of flexibility for the right borrower. The lenders typically set the terms and requirements, and those can vary significantly. Embrace Home Loans can help you determine what jumbo loan may be right for you. We have expert lenders who understand the mortgage market and can guide you to the mortgage you need. Call us at 407-733-6425, and let us help you get a mortgage that’s big enough to meet your dreams.

8 Things to Love About VA Mortgages

One of the best benefits available to veterans, active-duty military, and some other eligible people is a VA mortgage loan guaranteed by the Department of Veterans Affairs. Commonly known as VA loans, these mortgages offer great interest rates, flexible guidelines to qualify, and no down payment. VA loans are available to most of the 1.5 million veterans in Florida, as well as current service members. Here are eight things to love about VA mortgage loans:

  1. No down payment. With a VA loan, you can finance up to the full purchase price of a home. If you want to make an optional down payment, you can, but it’s not required. VA loans do require a funding fee, an upfront charge that’s based on your service, the size of the loan, and other factors. But that fee can be financed with the loan so you don’t have to pay it all up front. And not all borrowers have to pay the fee as it can be waived for some borrowers.
  2. Low interest rates. VA loans are guaranteed by the VA Home Loan Guaranty Program. That means the federal government will repay a portion of the loan if you can’t make your monthly payments. The guarantee protects the lenders from the risk of default, and that means they can offer you lower rates of interest.
  3. No mortgage insurance. Mortgage insurance protects the lender in case the borrower defaults on his or her loan, and most borrowers have to pay for it. But since VA loans are guaranteed by the government, no mortgage insurance is required.
  4. Easy qualification. You’ll need an acceptable credit history and enough income to make your payments, as you would with any mortgage loan. However, VA guidelines are more flexible than those for other mortgages, so it can be easier for you to qualify.
  5. Many options. VA loans provide several options from a lot of different lenders. They can be fixed or adjustable, allow you to make repairs or refinance your existing loan, or even make energy-efficient upgrades. VA loans are offered by banks, credit unions, mortgage lenders, and other financial institutions, and each one has different rates and fees. So there are a wide variety of VA loan options from which you can choose.
  6. Low closing costs. The Department of Veterans Affairs establishes limits on the closing costs that lenders can charge to VA borrowers, another money-saving feature.
  7. No prepayment penalty. If you decide to sell your home later, VA loans don’t allow any prepayment penalty. They also don’t allow any restrictions on refinancing your home.
  8. Streamlined refinancing. The VA also offers an Interest Rate Reduction Refinance Loan (IRRRL) that allows you to refinance your VA loan to a lower rate if interest rates drop. You can also refinance from an adjustable rate to a fixed rate. IRRRLs have little paperwork and often require little to no out-of-pocket costs.

If you’re an eligible VA borrower in the Sunshine State, Embrace Home Loans can help you take advantage of your VA loan benefit. We’ll work with you to look at your VA mortgage options and figure out the financing that’s right for you. Contact us today at 407-733-6425, or browse the rest of our website, for more information on our services.

Jumbo VA Loans in Florida: What You Need to Know

Mortgage loans guaranteed by the Department of Veterans Affairs (VA) are a great deal for eligible veterans here in Florida. Qualified veterans can buy a home costing up to $417,000 in most Florida counties with no money down. In two counties, Monroe and Collier, the limits are even higher ($529,000 and $448,500, respectively). What happens, though, if you’re looking at homes that cost more than $417,000? Homes in many areas of Central Florida, for example, like Winter Park, Isleworth/Windermere, Heathrow, Alaqua, or Lake Nona, can easily exceed that price.

So, what can veterans who want a larger home do? One answer is a VA jumbo mortgage. A jumbo loan is any loan that exceeds the $417,000 limit. The VA doesn’t actually set maximum limits on its loans. However, lenders who want to sell their loans in the secondary market have to keep their loans within the maximum limit set by the Government National Mortgage Association (GNMA or Ginnie Mae). In Florida, that limit is $1,000,000. And, like regular VA loans, jumbo VA loans come with a lot of advantages:

  • Better rates. VA jumbo loans are still partially guaranteed by the VA, so lenders can recover at least part of their money if the loan goes into default. That means their risk is lower and lenders will typically charge lower rates. That significantly reduces your monthly payment.
  • Lower down payment. Unlike regular VA mortgage loans, VA jumbo loans do require a down payment. However, it’s frequently much lower than you would need to pay for a non-VA jumbo loan.
  • Fewer restrictions. Lenders have very strict requirements to qualify for non-VA jumbo loans because the risk is much higher. Because the VA backs part of VA jumbo loan, borrowers don’t need to meet as many underwriting qualifications.
  • No mortgage insurance. Jumbo VA loans do not require private mortgage insurance (PMI). That saves you even more money.

Ask an expert

An experienced VA jumbo mortgage lender, like Embrace Home Loans, can guide you through the qualification process and help you obtain a mortgage loan that’s big enough to meet your needs. Call us today at 407-733-6425, and let us get to work for you.

VA Mortgages and Part-Time Income: What Do You Need to Know?

A mortgage loan guaranteed by the US Department of Veterans Affairs (VA) is an important benefit offered to veterans, servicemembers, and military families. VA loans require no down payment, no private mortgage insurance (PMI), and have no prepayment penalty. Because they’re designed to help veterans become homeowners, VA loans can be extremely flexible, and eligible borrowers in Florida can even use part-time or overtime income to help them qualify for a VA mortgage. Here are some things to consider.

  • Work History: The first thing a VA lender will look at is your work history. Typically, lenders want to see at least two years of work history. That history can be with one employer, or more than one, depending on the lender. If your work history is shorter than two years, you may be asked to meet some other requirements, like showing a significant savings balance or a low ratio of debts to your income.
  • Reliable Income: The second thing that VA-approved lenders are looking for is reliable, consistent income. While qualifying for a VA loan with part-time income is certainly possible, it can be a bit more complicated than qualifying with a regular, full-time paycheck. If your job regularly schedules you for 30 hours of work each week, that’s consistent enough to meet most lenders’ requirements.
  • Lenders Differ: However, if you work 40 hours one week and 20 hours the next, that can be an issue for some lenders. If your hours are relatively consistent, the lender may simply average your income over a certain period (say the past year), and use that amount for qualifying you for a loan.
  • Overtime: Your lender will probably apply the same standard to overtime pay. If you regularly work overtime, it can be factored into your income. However, if your overtime hours are sporadic and inconsistent, remember that they may need at least 2 years history to average. Commissions and other short-term income may also need the same 2 years history.
  • Second Jobs: This can also face the same scrutiny. If you take on a second job for a few months before trying to qualify for a VA loan, it probably won’t count towards your income. If you’ve been working a second job for two years and it looks likely that you’ll be able to continue to do so, that income can probably be counted.

Check With Your Lender

Policies vary between VA lenders, so it’s a good idea to check with more than one. And remember, while short-term second jobs, overtime, and commissions might not count toward your income, you can use them to accumulate a down payment. Down payments aren’t required with VA loans, but you can opt to make one if it will help you qualify. Embrace Home Loans has worked with thousands of veterans to help them obtain VA mortgages, and we’ll be happy to provide you with more information. Call us at 407-733-6425, or contact us online.

Seven Reasons to Choose a VA Mortgage

If you’re a qualified veteran in the state of Florida, your VA loan benefit is an excellent way to finance a new home. Guaranteed by the Department of Veterans Affairs (VA), a VA mortgage loan offers a number of advantages that other mortgage programs don’t. VA loans were created to help active-duty military, veterans, and some other qualified groups buy homes at affordable rates, with fewer fees and other costs.

To obtain a VA loan, you’ll need a Certificate of Eligibility (COE) from the VA. Veterans, active-duty personnel, their spouses, and some other groups (including certain National Guard members, academy cadets, and others) are eligible. If you’re wondering if you qualify, visit this website to find out more. So, what do VA loans offer that other mortgages don’t? Here are seven advantages:

 

  • Available through many VA-approved lenders. Every VA-approved lender sets its own interest rates, fees, and other charges. You can compare loans from different lenders and pick the one that you prefer.
  • Wide range of options. VA loans can be used for houses, duplexes, manufactured homes, or even condominiums, including new construction and existing homes. VA loans can have fixed or adjustable rates. You have many choices available.
  • Flexible qualification guidelines. VA loans do have credit and income requirements, but the fact that they are guaranteed by the VA means lenders are more willing to accommodate VA borrowers.
  • No down payment. With a VA loan, you can finance up to 100 percent of your home’s purchase price.
  • No mortgage insurance. Since the mortgages are backed by the VA, you won’t need mortgage insurance.
  • Low closing costs. To make VA loans more affordable, the VA limits the closing costs that lenders can charge you.
  • No prepayment penalty or refinance restrictions. If you sell or pay off your home early, there is never a prepayment fee, and you can refinance at any time. In addition, the VA’s Interest Rate Reduction Refinance Loan (IRRRL) offers VA borrowers a streamlined way to refinance.

 

A VA-approved lender can help you review your VA loan options and decide which one is best for you. At Embrace Home Loans, a VA-approved lender, we have experts in VA mortgages who will work with you to help you get the most from your VA loan benefit. Call us today at 407-733-6425.

Using Part-Time Income to Qualify for a VA Loan

One of the many nice features of loans guaranteed by the Department of Veteran’s Affairs (VA) is that VA-approved lenders will generally consider your total financial picture when you’re trying to qualify for a loan, rather than simply following specific rules or a checklist. That means that people with military backgrounds who eligible for VA mortgages may be able to qualify using part-time income.

Be consistent

Consistency is the key to using part-time income (or overtime, commission, or self-employment income) to qualify for a VA mortgage. Your VA-approved lender will want to see that your income has been consistent and is likely to continue into the future.

Generally speaking, a two-year history is sufficient to prove your income is reliable. The lender will probably average your income when deciding whether or not you’ll qualify.

Ideally, your two-year history should be with a single employer, but some lenders may be willing to consider employment from several employers. If you don’t have a two-year history, you may be able to compensate for that by making a down payment, having a significant financial reserve, or demonstrating a low debt-to-income (DTI) ratio.

The consistency guideline means that borrowers who take a second part-time job, or volunteer for overtime, to qualify for a VA loan may be disappointed. Just picking up extra income for a few months won’t help qualify for a VA loan. Without history, your lender probably won’t consider that income when considering your loan application.

Shop around

It’s important to remember that policies and guidelines vary from lender to lender, so it’s worth your time to talk to more than one. At Embrace Home Loans, we’re experts in VA lending, and we can help you understand what your income requirements may be and how part-time income can help you qualify for a VA loan. Call us at 407-733-6425 for more information about part-time incomes and VA mortgages.

Young Adults and Jumbo Loans

Even with the Federal Reserve’s December rate hike, interest rates are still historically low. Those low rates, coupled with looser credit qualifications, are helping millennials (people age 35 or younger) qualify for mortgages and even jumbo mortgages.

Jumbo loans, often called “nonconforming” loans, are any mortgage loan that is over the conforming limits set by the Office of the Federal Housing Enterprise Oversight (OFHEO). So they can’t be guaranteed or purchased by Fannie Mae or Freddie Mac. Those conforming limits are $417,000 in most of the country but go up to $625,500 in areas with the highest housing costs. In Florida, Collier and Monroe Counties have higher conforming loan limits ($448,500 and $529,000, respectively, in 2015).

Easing Loan Qualifications

Lenders are beginning to work with borrowers who may not fit into existing borrowing guidelines but are otherwise qualified. For example, jumbo loans are typically only extended to extremely creditworthy borrowers, and usually require higher down payments (generally 20 percent or more). Some lenders, however, may only be requiring down payments of 15 or even ten percent.

Typically, a lower down payment on a jumbo loan means the lender will require a borrower to have more cash reserves. Often, that’s at least six months of the borrower’s monthly housing expenses (principal, interest, taxes, and association fees). A lower down payment allows borrowers to keep more money in the bank to meet the reserve requirement. A ten or 15 percent down payment on a jumbo loan is still a lot of money, but some millennials are turning to their parents for help to make those lower down payments.

Lenders have begun approving jumbo loans for borrowers who may not meet the usual qualifications for income documentation or minimum credit scores but who can compensate in other ways. For example, lenders often require two years of tax returns to document the income of someone who is self-employed. However, some may approve a person who has been self-employed for less time, as long as he or she has a track record in that industry and has adequate funds on reserve.

Lenders have also been more willing to count capital gains from investments as income if borrowers can show a consistent record of cashing in those gains.

Shop Around

Different lenders have different standards for loan qualifications. If you’re looking for a jumbo mortgage in Florida, Embrace Home Loans can help you evaluate your options and find lenders that may be able to accept your individual circumstances. For more information, please browse our website, or call us at 407-733-6425.

Could a Smaller Jumbo Mortgage Be an Option?

With home prices on the rise and as the market recovers from the mortgage crisis of 2008, more people are looking for larger mortgage amounts. The Washington Post reports that 23.5 percent of mortgage loans in 2014 were jumbo loans, and jumbo mortgages were up 9.8 percent in the first quarter of 2015.

The answer for some people may be smaller jumbo loans. Smaller jumbo loans sound like an oxymoron, like “jumbo shrimp.” The term, however, applies to loans that fall between the normal conventional loan limit, $417,000, and the traditional starting point for jumbo loans, about $625,500. The reason these loans exist is that, in certain high-cost geographic areas, the normal conforming limit set by the FHA is increased. In Florida, the 2015 conforming loan limit for Collier County is $448,500, and for Monroe County, it’s $529,000. These loans may also be called “conforming jumbo” loans, “agency” loans, or “high balance” loans because they still conform to Fannie Mae and Freddie Mac guidelines for purchase.

Different Standards

Typically, non-conforming jumbo loans (those that exceed the conforming loan limits) require higher credit scores than conforming loans and a standard 20 percent down payment. That’s because the mortgage company must keep the loan on their own books rather than sell it to Freddie Mac or Fannie Mae.

Conforming jumbos, however, can still be backed by government agencies and borrowers typically pay lower interest rates, have lower down payment requirements and have lower qualification requirements (these requirements vary from lender to lender). So a first-time home buyer in Monroe County who can choose between a conforming and non-conforming loan for $529,000 might very may well choose a conforming loan backed by the FHA with a 3.5 percent down payment, rather than a 20 percent down payment. A veteran eligible for a VA loan might choose a conforming jumbo VA loan.

Know Your Options

The differences between conforming and nonconforming jumbo mortgage loans can be complex, so it’s a good idea to research your mortgage options. At Embrace Home Loans, we are experts in jumbo mortgages and can help you understand what financing may be available to you. Please browse our website for more information, or call 407-733-6425, and we’ll answer your questions about mortgages in the Sunshine State.

VA Home Loans are Surging

Home loans guaranteed by the Office of Veteran’s Affairs (VA) are rising. In fact, in Florida, VA mortgages to purchase a house increased by 22.8 percent in 2014.1 Eligible borrowers (veterans with at least 90 days of active duty during war years) can take advantage of low-cost mortgages at very favorable terms. The VA guarantees the loans, which are offered by approved lenders. The VA’s guarantee protects the lender against loss, which means the lender provides more favorable loan terms to veterans.

Why the increase in VA loans? There are a lot of reasons:

  • Mortgage rates are at near-historic lows, according to Freddie Mac.2 That means many veterans are rushing to lock in these rates while they’re available.
  • Military borrowers can finance up to 100 percent loan-to-value (LTV) on purchase loans, and they have access to a streamlined refinance program that allows them to quickly take advantage of lower rates.
  • In addition to lower mortgage rates, VA loans feature easier mortgage approval requirements.
  • The VA loan benefits can be used over and over, as long as the VA loan has been paid in full following a sale, another veteran has assumed the outstanding VA loan balance, or there is enough remaining Entitlement.

Streamlined Refinancing

The VA mortgage program also features one of the easiest and fasted home loan refinancing programs available in the mortgage market, called the Interest Rate Reduction Refinance Loan (IRRRL). This program waives almost all of the normal verifications and documentation that other refinancing loans require. Qualified veterans don’t have to provide income documentation, credit, verification of employment, or a property appraisal. As long as you’ve made their mortgage payments on time over the last year, and refinancing will save you money, the VA will allow you to refinance.

Take Advantage of Your VA Benefits

If you’re a qualified veteran and want to find out more about your VA home loan benefit, contact Embrace Home Loans at 407-733-6425. We’re mortgage professionals with extensive experience in VA mortgages, and we’ll work with you to get you home you’ve always wanted.