Currently, if you are a veteran buying a home using a VA loan, a purchase price under $484,350 allows a 0% down payment. For a purchase price over $484,350 it requires a 25% down payment of the amount that exceeded the $484,350 maximum. For example, if the house you are buying is $584,350 ($100,000 over the current maximum amount), you would have to put $25,000 as a down payment on your mortgage.
With upcoming changes for VA loans closing on or after January 1, 2020 there is no down payment required on any loan amount. Meaning, if you purchase a home with a sales price of $584,350, you no longer need to make that $25,000 down payment. This change applies to VA loans with Full VA Entitlement only. This change means that Veterans will have:
- Lower to no down payment requirements
- Better interest rates than Conforming Conventional, or Jumbo Conventional loans
- No monthly PMI (Private Mortgage Insurance) payments
While this change in VA Loan requirements has several upsides, it does not mean that a VA Loan is an excellent loan option for Veterans and In-Service Personnel. Each home purchase is unique and alternative loan options should be reviewed prior to making your final decision. Be sure to reach out to a loan advisor to review all options before you make your final decision.
Have questions? Contact the CB&T Mortgage team today!