A VA Loan Myth Dispelled


Recently, I had the pleasure of meeting with a person who is new to being a real estate agent but not new to selling a house. Our conversation turned to the subject of her own home that she and her husband were about to put on the market. She wanted to know what mortgage options were available to potential buyers. That’s because her home would list for approximately $550,000. FHA, wouldn’t be an option because the loan amount caps out further south than $550,000 – she knew that. But what about the VA? She started to say that she knew the cap on a VA loan. While not as low as FHA, it was still not high enough to enable someone to buy her home using that option. Not true – not entirely.


One of the great benefits of a VA loan is the fact the buyer isn’t required to put any money down. But like many benefits, there’s a limit. In the case of a VA loan, that limit is $484,350 (unless the house is in a high-cost area). Let’s take patriotism aside. A difference of $65,650 between the limit and the asking price in my new agent friend’s case is a tad beyond negotiation. In this case, a VA loan is still a very viable option. So I urged my new friend that she should say in her listing that she accepts VA loan offers. Unlike unicorns and politicians who don’t have an ego, there IS such a thing as a VA Jumbo Loan – no myth!

Caps when dealing with VA Loans

While there’s a cap of $484,350. That cap applies to the amount up to which the borrower will not have to come in with a down payment. With a VA Jumbo Loan, the borrower is only required to bring in 25% of the DIFFERENCE. That’s between the loan limit and the buy price. In my friend’s case, that difference is $65,650. That means a VA borrower could buy her home with a down payment of ONLY $16,412.50. Yes, you read that exactly. For less than 3% of the sale price, a VA borrower could use their benefit and buy that house.

On my friend’s listing, it’s imperative that she states that VA loan offers work. The main reason is that more than the majority of agents are like she was before our meeting. And don’t believe it’s even an option. I didn’t get a finance degree from Harvard (although I did buy a t-shirt there once). But, I’m certain that increasing the number of potential buyers for your property is a good thing.

For more information feel free to contact Priority Lending LLC today.

mortgage, prioritylending, realestate, valoans

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