This year the VA has established new ways to calculate the limits and payments they establish for loans. It was because of this a decrease in the limits for VA loans have been established for certain areas. For the contiguous United States the average limits for loans established by the VA will have a range of $417,000-$625,000.
In the states such as Guam, Hawaii, Virgin Islands and Alaska the limits are set to be$625,000-938,250. The limits that are established by the VA will vary greatly depending on the housing costs that are associated for the county you live in.
In some counties there has been a significant decrease in the limits for VA loans such as Nantucket. In Nantucket the VA originally had a limit of $1,094,625, but has recently been changed to $625,500. The reduction in loan limits however, is partially because of the new way loans are calculated. A major factor in the limits for VA loans is because of the reduced prices for homes on a national level.
There has been no annual increase for homes since 2006. If you wish to know the limits in your area it is best that you check the prices that the VA puts out each year.
You should never use the words “loan limit,” in a literal sense. When dealing with the VA you will notice that a guarantee actually means the amount of money the VA is willing to give a guarantee on. Every loan that the VA will grant someone will always have a 25% guarantee on any amount of money that is over $417,000. The security that is offered with VA loans offer security through federal backing. This in turn will often reduce the chance that he person who is borrowing the money will have to make any down payments.
If you do inquire to have a loan amount that goes over the designated loan limit in your county you can always expect to pay something down. Any person that has the requirements necessary to apply for a VA loan may inquire to buy any loan amount. It is of course always best that if you have a lot of unanswered questions about VA loans that you ask a VA lender. If you seek a VA loan for a home always make sure you are able to be pre-qualified. The pre-qualification process will mostly involve the use of a person’s veteran’s benefits.
After you have been pre-approved you will want to make sure that you actually find a home in the price range you are looking for. You will more than likely have to show whoever the seller is that you have a letter that shows you have been pre-approved. When you have a veteran mortgage it will give your seller the chance to pay your closing costs at 4%. Always be sure that closing costs are directly stated in the closing costs with the seller so you can avoid any form of confusion when it comes time to make payments.