If you’re looking at buying the home of your dreams – and the price reflects it – then a VA jumbo loan may very well be the best option for your mortgage.

In most veteran loan scenarios, the VA guarantees up to 25% of the total amount of the loan up to the VA loan limit in your county – which, in much of the US, is $417,000.

But what happens when the value of the loan exceeds your county loan limit?

This is where VA jumbo loans come into the picture.

For the purposes of this example, let’s say that you live in a county where the VA loan limit is indeed $417,000. You find the perfect house for you and your family, and it’s selling for $517,000.

You decide that you would like to use your hard-earned veteran benefits to take out a VA mortgage!

So, the VA guarantees $104,250 of your loan (with $104,250 being 25% of $417,000). Yet what happens with the remaining $100,000 of the loan?

Simple. The U.S. Department of Veterans Affairs mandates that on jumbo loans above the county loan limit, the borrower put down 25% of the difference between the cost of the loan and the applicable county VA loan limit.

Continuing on with our jumbo loan example from above, 25% of $100,000 ($25,000) would be required as a down payment, and the VA would guarantee 25% of $417,000 ($104,250).

Not bad at all! In this example you’re buying your $517,000 dream home for only $25,000 down in addition to the required closing costs.

The real value of VA jumbo loans is apparent when you compare and contrast it to the standard down payment requirement of a conventional mortgage, which is typically 20% to avoid paying private mortgage insurance.

This means that for the example $517,000 house, a conventional loan down payment would be $103,400 while a VA loan down payment would only be $25,000. That’s less than one quarter of the down payment required for the conventional loan in this scenario!

Please keep in mind while house shopping that VA county loan limits vary widely throughout the country and will be higher in areas with especially high property values. Once again, the standard VA county loan limit is $417,000, but it’s smart to check with your local VA mortgage agent prior to looking at houses.

For example, as of 2011 the VA county loan limit for Marin County is $1,000,000! San Francisco County has a loan limit of $1,000,000 as well.

To check what the VA county loan limits are for each county in the United States, you can visit the U.S. Department of Veterans Affairs at their loan limit website. For counties that are not listed on the website, the official VA loan limit is automatically set at $417,000.

Why is there such as large difference in county loan limits throughout the nation? In short, because the various housing markets across the country vary greatly.

In San Francisco a small single-family house may sell for $1,000,000, while in other places you might be able to find a similar house for $100,000!

Wherever you are, if you are in need of a substantial home loan, a VA jumbo loan is certainly worth checking out.

A VA loan pre-approval letter is a document granted by a VA mortgage lender that states that based on preliminary information such as the potential borrower’s credit, assets, and income, that they qualify for a VA loan of a specified amount.

It is different from a pre-qualification in that some or all of the submitted information is reviewed for accuracy before the letter is issued.

Having a pre-approval letter from your VA lender will show home sellers that you are a qualified buyer and may lead to your offer being more seriously considered.

Once you have obtained your VA loan pre-approval letter, you will then be able to begin making offers on homes you are interested in purchasing.

In order to get your VA loan pre-approval letter, your lender may require the following:

• At least one months pay stubs or LES (if still active duty).
• W-2’s and Tax Returns for the past two years.
• Two months bank statements for any/all assets.
• Your DD 214 form (if no longer on active duty).
• Statement of Service from S1 (if still active duty)

Your pay stub is needed to show that you are currently employed, as well as your current income. W-2 statements (for the past two years) then show how much you normally earn in a year.

If you are currently still on active duty, your Statement of Service must show a minimum of 12 months remaining on your contract.

Finally, your DD 214 form will enable your VA lender to decrease the amount of time necessary for processing your certificate of eligibility. Once again, this is not required, but it is generally a smart idea.

The reason why this is a smart idea is that the majority of direct lenders with the VA can put in an order for your certificate of eligibility, which determines whether or not you are eligible for a VA loan.

The process can be very quick as long as you turn in all these documents as soon as possible to your loan officer.

After your VA loan officer or lender has the described documents, he or she can submit your information in the VA loan analysis software to determine your eligibility. The calculation that will determine your eligibility is:

(Monthly Income) – (Proposed Mortgage Payment + Insurance + Taxes + Utilities for the house + Monthly Credit Card Payments Due) = Residual Income

Residual income is the amount of money that you have after you have paid the sum of your monthly bills. The VA will use their judgment after they have calculated your residual income to decide if you will have a satisfactory amount of money left over after you have paid your bills.

The VA has established various requirements for what your minimum residual income will have to be, such as what part of the country you live in, the size of your family, how old your children are, and various other factors.

When obtaining VA pre-approval letter, be aware that simply getting the letter does not commit the lender to giving you a loan. It just means the initial information has been reviewed. In order for the mortgage application to be approved additional information and documentation about both the borrower(s) and the property must be reviewed to be sure that all of the guidelines are met.

DD 214 forms are required of veterans when applying for a VA mortgage loan, and, unfortunately, are commonly misplaced over time.

The good news is that losing or misplacing your DD 214 is an easily remedied problem!

For starters, let’s go ahead and define what a DD 214 is and what it is used for:

A DD 214 (short for Defense Department 214) form is issued to military members upon retirement, separation, or discharge from active duty. Also called a Certificate of Release or Discharge from Active Duty, this paperwork lists the details of the veteran’s status during the time they changed to inactive and if they left honorably or dishonorably.

DD 214 forms are a vital part of getting a VA loan for those applicants who are no longer in the military. They are required by the federal government in order to prove your qualification.

Remember that a Certificate of Release is not just for getting approved for a VA loan, so it’s generally a good idea to have yours accessible. You can use this paperwork to qualify for a variety of additional veteran benefits.

There are different ways you can acquire this paperwork:

1. Veterans receive a copy of their DD 214 when they leave active duty. They get their form regardless of the circumstances behind their leaving.
2. If you are a spouse (note: you can’t be re-married), a parent, or a child or sibling of a veteran, you can get a copy of from either the National Archives or the U.S. Department of Defense.

If you did receive your DD 214 when you left active duty but have misplaced or lost it, you can also get a copy of it through the National Archives or the U.S. Department of Defense.

For veterans, Certificate of Release copies are typically free of charge, although spouses and family might have to pay a nominal fee.

To request a copy, you will first need to fill out Standard Form 180 (also known as SF 180). You can download a copy of it HERE.

After you have filled out both sides of SF 180 you can then either fax or mail it to the address listed on the bottom. Simple enough!

Once you have you DD 214, be sure to confirm that it has the following information:

• Your complete name during your time of service.

• Date of birth.

• Your specific service branch.

• The dates of your service.

• Your social security number.

• Your service number.

As we already mentioned earlier in the article, having a DD 214 form is absolutely essential in applying for and getting approved for a VA loan. If you do not currently possess yours, you should request a copy of it as soon as possible, even if you are not currently shopping for a new mortgage or refinance.

This will ensure that when you do begin the VA loan process your approval won’t be held up waiting for the form to arrive.

There are many ways in which a getting a divorce can have an impact on Boise Idaho VA loans.

Let’s go ahead and start off with the basics.

First, let’s look at a scenario where the Boise Idaho VA loan is only filed under the veteran’s name.

The VA loan guaranty is only available due to the veteran’s eligibility for the loan.

After the VA loan is processed, the guaranty will remain with the mortgage even if the borrowing veteran or member of the armed forces stops living there. The only way the VA loan guaranty will be removed is if the loan is refinanced by the former spouse into a conventional mortgage, which will then make the military borrower again eligible for a new VA mortgage.

Jointly held mortgages are a little different from the above process.

The name of each spouse is on the mortgage, and if they both work the couple may qualify for a higher loan amount with their combined income than either would individually.

Only one spouse needs to be a veteran or military service member and eligible in order to get qualified for a VA loan. After the VA guaranty is committed to a mortgage, it is no longer attached only to the veteran borrower.

This is what makes joint mortgages a little tricky when it comes to divorce, especially since few ex-spouses will want to maintain a joint mortgage together. With this in mind, there are a few potential situations that can arise:

• The ex-spouses can sell their property and divide the equity or debt.

• They can designate sole-ownership of the property to one person and then refinance the mortgage into the name of just one borrower.

• If neither ex-spouse can qualify for a loan on their own, the original mortgage will remain until the property is sold. In this case, the veteran will not be eligible for another VA loan as long as the original mortgage remains.

After the mortgage is terminated, the veteran can apply for a new loan guaranty. Normally, there will not be any change from the original eligibility.

It is critically important that after the divorce a complete copy of the divorce decree and any payments to the ex-spouse are documented.

If you have a VA loan and you’d like to get a VA IRRRL loan (also known as a VA Streamline Refinance), there are also some things you should keep in mind if you are going to get divorced, married, or re-married.

During your regular VA loan application process, each of the borrowers whose names appeared on the loan was reviewed by the VA. Since VA IRRRL loans do not require a credit check, you are required to keep each borrower from the original loan on your VA Streamline Refinance.

Unfortunately, there is no way to remove a borrower for a VA Streamline Refinance.

In order to get a new VA loan during or after getting a divorce, you will be required to follow the steps of your first VA loan.

However, if you are getting married, already have a VA loan and decide to get a VA Streamline Refinance, you are allowed to add your new partner to the loan.

Frequently Asked Questions:

Q: Are the children of a living or deceased veteran eligible for the home mortgage benefit?

No, the children of an eligible veteran are not eligible for the home mortgage benefit.

Q: How can I obtain proof of military service?

Standard Form 180, Request Pertaining to Military Records, is used to apply for proof of military service regardless of whether you served on regular active duty or in the selected reserves. This request form is NOT processed by VA.

Rather, Standard Form 180 is completed and mailed to the appropriate custodian of military service records. Instructions are provided on the reverse of the form to assist in determining the correct forwarding address.

Q: Is the surviving spouse of a deceased veteran eligible for the home mortgage benefit?

The unmarried surviving spouse of a veteran who died on active duty or as the result of a service-connected disability is eligible for the home loan benefit.

If you have any questions about Idaho VA Mortgage Home Loans feel free to contact me.

In order to apply for a VA loan you will need a Certificate of Eligibility, or COE for short.

There are different steps required to receive a Certificate of Eligibility depending on your personal situation and branch of the military.

Group 1: Veterans, Activity Duty, Reservists and National Guard Members Who Been on Active Duty

If you belong to one of the above categories then you have three different ways that you can receive a COE:

• Apply Through Mail: Fill out VA Form 26-1880, which you can find on va.gov, the official VA website. You can then mail it to the address that is listed on the form.

• Apply Through A Lender: Your lender may be able to acquire your COE for you online; if so, the process typically only takes a few minutes. Be sure to speak to your lender beforehand to determine whether or not this is an option.

• Apply Online: Visit the Veterans Information Portal at http://www.ebenefits.va.gov to request the certificate.

If for whatever reason you cannot print out Form 26-1880 you can contact the VA at 1-888-244-6711 and request a copy be mailed to you.

Group 2: Reservists and National Guard Members Who Have Not Been On Active Duty

Group 2 enjoys the same options as Group 1 above.

Group 3: Spouses of Veterans Who Either Passed Away During Service or As a Result of Service

Unlike the application options for Groups 1 and 2, you are required to mail your application.

If your spouse passed away during service, the process is relatively quick and straightforward. However, if your spouse passed away after service, the VA must first confirm that the death resulted from a disability connected to the service.

This process can take anywhere between 2 to 3 months depending on the current caseload of the VA.

To apply, download and fill out VA Form 26-1817, which you can find on http://www.va.gov, the official VA website. The address you should mail the form to is:

VA Loan Eligibility Center
PO Box 20729
Winston-Salem, NC 27120

Similar to above, if for whatever reason you cannot print out Form 26-1817, you can contact the VA at 1-888-244-6711 and request a copy be mailed to you.

Regardless of the category you personally fall into, you will have to provide some sort of evidence to prove you are eligible for a COE. The eligibility graph on the VA website (located at http://benefits.va.gov/homeloans/eligibility.asp) details exactly what kind of evidence will be required from you.

A very common question related to VA refinancing is whether or not you can get a refinance on a VA loan if you are currently upside down on your mortgage.

Simple Answer: Yes you can!

Just to be clear, being “upside down” on a mortgage is when you owe more on your mortgage than what your home is actually valued at in the present economy. This is a highly unfortunate situation that many American homeowners are facing today.

Here’s an example scenario:

Let’s say that you bought a home back in 2006 for $250,000. The 2006 economy was pretty strong, and home prices in many markets throughout the country were steadily increasing in value.

Now let’s fast-forward to today. The recession that started in 2008 has been declared “over” by the National Bureau of Economic Research (NBER for short), and the economy is in the first stages of recovery.

Considering the current housing market, it’s possible the home you bought in 2006 won’t sell for the same price or higher today. For this example, let’s say the market price in your area is now $200,000.

The catch is even though the market price is now $200,000 today, you still owe the remaining principal on the $250,000 on the mortgage you took out in 2006. Unless you’ve made extra payments to pay down the loan, it’s likely your balance is still greater than the $200,000 your home is worth.

In other words, you are upside down on your mortgage.

With that said, there is some great news for veterans:

In 2008 a law titled the “Veteran Benefits Improvement Act” was passed to assist veterans who were upside down on their mortgage. This law created the opportunity for eligible veterans to get a VA refinance and drastically change their mortgage state of affairs.

The Veterans Benefits Improvement Act of 2008 was signed by President Bush on October 10, 2008 and was officially applied by the VA on October 16, 2008.

The enhancements made to the VA home loan program are as follows:

• The VA’s ability to guarantee both VA adjustable rate mortgages (ARM for short) and hybrid adjustable rate mortgages (similarly called HARM for short) was extended to September 30, 2012. Prior to this extension, the VA would not have been allowed to guarantee the ARM and HARM programs after the end of September back in 2008.

• Eligible veterans can now apply for and receive a Cash Out Refinance Loan for up to 100% of the VA-appraised value of a home. *However, most lenders will only allow cash out to 90% of the appraised value.

• An increase was made to the VA refinance maximum guarantee, and it is now identical to the maximum guaranty of standard purchase loans. Bear in mind that the amount of the guaranty varies according to the scenario in question.

• An extension was made to the max amount that the VA will guarantee; it is now set to expire on December 31, 2011. Once again, the amount of the guaranty varies.

The VA Funding Fee is a fee that is required in order to receive a VA loan.

There are a few exceptions that allow for the fee to be waived:

• Veterans who are getting VA compensation due to service related disabilities.

• Veterans who would be receiving VA compensation due to service related disabilities if they were not already receiving retirement pay.

• Loans for spouses of veterans who passed away in service or because of service related disabilities.

VA funding rates have changed over time, but the rates listed in this article are for VA loans that will be closed before October 1, 2011. If you are interested in taking out a VA loan past this date, please feel free to contact us for the current fee amounts.

The amount of the VA funding fee required varies based on the amount of the down payment, whether this is the first time the borrower has taken out a VA loan, and whether the borrower served in active duty or in the reserves or National Guard.

For VA loans, borrowers who have served in active duty are categorized as either a first time user or a subsequent user.

For first time users, the fee structure is set up as follows:

• 0 to <5% down payment: 2.15% fee

• >5 to <10% down payment: 1.5% fee

• More than 10% down payment: 1.25% fee

For subsequent users that are active or retired, the fee structure is:

• 0 to <5% down payment: 3.3% fee

• >5 to <10% down payment: 1.5% fee

• More than 10% down payment: 1.25% fee

As you can see, the only change in the fee structures for first time and subsequent users is when the borrower goes with the “no down payment” option.

The difference between the two ends up equaling 1.15%, which is a fairly significant amount of money.

If you are considering taking out a VA loan and would be classified as a subsequent user (meaning you have already taken out a VA loan in the past), then you should strongly consider making a down payment.

For military members who have served in the active duty obtaining cash-out refinancing loans, the fee for first time users is 2.15% while the fee for subsequent users is 3.3%.

The funding fee requirement for both the Reserves and National Guard members is as follows.

For first time users, the fee structure is:

• 0 to <5% down payment: 2.4% fee

• >5 to <10% down payment: 1.75% fee

• More than 10% down payment: 1.5% fee

For subsequent users the fee structure is:

• 0 to <5% down payment: 3.3% fee

• >5 to <10% down payment: 1.75% fee

• More than 10% down payment: 1.5% fee

For Reserves and National Guard member cash-out refinancing loans, the fee for first time users is 2.4% while the fee for subsequent users is 3.3%.

In addition to the loans listed above, the VA requires funding fees for interest rate reduction refinance loans, also known as IRRRLs. The rate for an IRRRL is currently set at .5%.

There is also a VA-required funding fee for Manufactured Home Loans, which is currently set at 1%.

Lastly, the funding fee for a Native American Direct VA Loan is 1.25% at present, and the funding fee for a VA Assumption is .5% at this time.

When veterans apply for a VA loan they are required to provide a Statement of Service letter, otherwise known as a SOS.

The Statement of Service letter has to be specifically geared towards a home loan, and can be obtained through your local office for military personnel.

A Statement of Service is a document which verifies that you are either an active military member, or are retired with at least 6 years of active service prior to retirement or discharge.

A SOS letter is required for VA loans in order to combat fraud and incorrect information. Although it is an extra step in the process, SOS letters ultimately help guard military service members by restricting VA loan availability to only those who qualify due to their service. Because of this, SOS letters are an integral part of the process behind getting approved for a VA loan.

After obtaining a SOS, the next step is to accurately complete it and have it signed by your commanding officer. It is very important that your SOS has both correct information and a signature.

Plan ahead and obtain your Statement of Service letter early in the VA loan process. This will help ensure that your VA loan approval process goes as quickly and smoothly as possible.

According to the Department of Veterans Affairs, if you retired or were discharged from the military after January 1, 1950, you can provide a copy of your DD Form 214 as evidence. If you are still active in the military, a Statement of Service letter is required.

Below is a great example of a Statement of Service letter from the Department of Veterans Affairs website, located at benefits.va.gov/ under the section titled “Chapter 2.”

Although your personal SOS does not have to follow this format, it should contain the same information.

MEMO TO VA REGIONAL OFFICE

SUBJECT: Statement of Active Military Duty Service

1. I certify that I, as Commanding Officer, am the official custodian for the personnel records of:  <insert name>

a. Name: b. Social Security ID: c. Service Serial Number (If different to b.) d. D.O.B. : e. Rank/Rating:

2. Below is an entire Statement of Service of active duty periods of service by the Veteran stated above.

A. From (date of service entry) b. To: c. Status: d. Separations and Forms Issued: e. ETS:

3. I certify the veteran stated above has lost ____ days of active service during their current period.

4. Service member is not barred from re-enlistment.

a. Type / Print Name: b. Signature: c. Title: d. Date: