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Wednesday, 23 September 2015 00:00

Indigo Mortgage Offers VA Jumbo Loans

A lot of vets considering a home purchase don't know that the Veterans Administration offers a jumbo loan or how those loans work. A VA jumbo loan can be used when a veteran needs a mortgage loan of $417,000 or more.

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If you are a veteran, you may have received various e-mails and mailings recently from VA lenders promising extremely low interest rates- usually below 3%. Many savvy loan shoppers have contacted Indigo Mortgage with questions regarding these offers, and specifically, are they legitimate? The short answer from the experts at Indigo Mortgage is, unfortunately, that they are not.

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Indigo Mortgage is now able to offer veterans the 100% refinance loan. This is another great loan program for veterans, but it is not offered by all lenders. The 100% refinance loan is available to veterans who want to pay off debt but cannot actually take cash in hand.

To clarify, here are some scenarios: if a veteran wishes to pay off a non-VA loan and convert it into a VA mortgage, this loan will allow 100% of the value to accommodate the refinance. In comparison, most VA lenders usually allow 90% of the appraised value and will not go up to 100%. In another scenario if the veteran has a first and a second mortgage and wants to combine them into a single mortgage, this VA loan will accommodate that up to 100% of the appraised value, again compared to only 90% from most lenders. And finally, If the veteran wants to consolidate debts such as high interest credit cards, installment loans, or any other consumer credit, this VA loan will allow it as long as there is no cash in hand back to the veteran, it must be used to pay off debts. This loan is also priced the same as a regular VA loan so there is no hit to the rate. The VA loan never has mortgage insurance, but is subject to the VA funding fee between 2.15 and 3.3% depending if the veteran has used their benefit in the past.

An appraisal is one of the requirements for 100% VA refinance eligibility, again no cash in hand back to the veteran is allowed, the veteran must credit qualify, they must have their eligibility intact, and a VA funding fee is charged unless the veteran has a disability of 10% or more.

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At Indigo Mortgage, we close more VA loans than any other company in New Mexico. We understand veteran’s requirements and work to make the process smooth for all veterans who have served our country.

There are several options a veteran has in order to take advantage of the VA cash-out loan program:

  1. When a veteran has an existing mortgage that is not currently a VA loan, but wants to refinance that mortgage into a lower rate using the VA:
    --The VA will allow up to 100% of the value of the home to do the refinance. So if the veteran owes 200K on the home and the value is 200K they can take advantage of the VA loan.

  2. If a veteran wants to pay off a 1st and 2nd mortgage:
    --The VA will allow up to 100% of the value to pay off both loans.

  3. If the Veteran wants to do a debt consolidation:
    --The VA will allow 100% of the value IF all of the proceeds go to pay off debts. It will not allow 100% if the veteran wants cash in hand.

  4. If the veteran wants cash-out to do home improvements, or just cash-in hand
    --The VA will allow 90% of the loan to value in this case.

The VA does not have any monthly mortgage insurance so there is never any PMI on any Veteran loans but the VA does have a funding fee. If the veteran has used their benefit before, and wants to use it a second time the funding fee is 3.3% which is financed and added to the top of the loan. If the veteran is a 1st time user of the eligibility then the funding fee is 2.15%. Now if the veteran is receiving 10% or more in disability then all funding fees are waived.  As you can see, there are many options for the veteran, so I suggest they just call the VA Mortgage loan center at Indigo Mortgage and let one of our VA loan officers answer any questions.

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