Virginia Jumbo Loans

Are you looking to buy a home or investment property in Virginia, but conventional loans aren’t offering enough? Jumbo loans are the perfect solution. These other loans provide financing for properties that exceed conventional loan limits set by the Federal Housing Finance Agency (FHFA), allowing you to purchase higher-value homes.

What is a Virginia Jumbo Loan?

A jumbo loan is a property loan that exceeds the conforming loan limits set by Fannie Mae and Freddie Mac. In many cases, these loans are ideal for purchasing properties with a higher price tag and even luxury properties. 

Any home loan above the conforming loan limit in Virginia, about $806,500 for a single-family home, is considered a jumbo home loan. This limit is determined by location. Higher-cost counties may have a limit up to $1,149,825.

These home loans are beneficial because they’re great for properties in high-cost areas, offer fixed or adjustable loan rates, and can be used on various properties, not just your primary residences.

Virginia Jumbo Loan Benefits

For those who qualify, jumbo home loans can provide many benefits. Some of the main benefits that Virginia homebuyers can take advantage of with these loans are: 

  • Access high-value properties exceeding FHA loan limits, like a historic mansion in Alexandria or a modern penthouse in Arlington.
  • Secure financing for luxury properties, from Virginia Beach waterfront homes to downtown Richmond condos.
  • Finance various property types, such as a vacation home in Norfolk for personal use or a multi-unit building in Charlottesville for rental income.
  • Avoid private mortgage insurance (PMI), as many jumbo loans do not require PMI, even with a down payment of less than 20%.
  • Simplify the financing process with a single loan amount, easing property management.
  • Enjoy the competitive interest rate and loan terms for high-value purchases, such as a mountain retreat in the Shenandoah Valley.

Risks of Jumbo Loans in Virginia

There are risks associated with any new loan, especially with jumbo home loans. While the benefits greatly outweigh the risks for most borrowers, understanding the risks will help you combat them: 

  • Higher Interest Rate: These loans have higher interest rates than conforming loans, posing a higher risk for the lender and higher monthly mortgage payments for borrowers. 
  • Stricter Qualification Criteria: Since the loan amount is higher than for traditional loans, the requirements you’ll need to meet to qualify will be far more stringent. 
  • Market Fluctuations: Market fluctuations can affect high-value properties, sometimes leading to negative equity for owners. 
  • Larger Down Payments: These home loans require a much larger down payment, usually at least 20%. 
  • Financial Strain: With higher monthly debt payments and potential market issues, your expenses may increase or decrease, leading to potential financial strain. 

Let’s look at an example of how these risks affect jumbo mortgages. If you bought a home in Virginia for $2 million with 20% down, the market takes a downturn, and your property value drops by 15%, you’ll likely start owing more on the home than it’s worth. The best way to mitigate the risks are: 

  • Build a large emergency fund in the event of market fluctuations 
  • Look for the best loan rates and terms
  • Assess your long-term financial situation before committing to a jumbo home loan
Virginia Jumbo Loans

Why Choose F5 Mortgage for a Virginia Jumbo Loan?

Choosing a lender for your jumbo loan isn’t something you should take lightly. The right lender can make or break the entire financing process. F5 Mortgage has been a trusted mortgage lender in Virginia for years. We offer our clients advantages like:

Competitive Interest Rate

We offer competitive interest rates to make purchasing a home or property more accessible.

Better Loan Terms

In addition to our competitive interest rates, we’ll work to offer you the right loan terms that suit your needs.

Streamlined Process

We have an all-online process to help everything run smoothly and efficiently.

Mortgage Expertise

Our brokers are deeply aware of all the nuisances of a jumbo home loan and will be able to guide you throughout the home purchase process. 

Personalized Mortgage Solutions

We understand each client is unique, so we personalize all our solutions to match your needs. 

Flexible Loan Options

Not everyone will need a jumbo loan. We’ll help you determine whether a fixed-rate or adjustable jumbo home loan is better for you.

When you choose F5 Mortgage, you’re getting a partner who wants to see you secure high-value properties in Virginia.

Virginia Jumbo Loan Requirements

Whether you’re applying for a traditional or VA jumbo loan, there are specific requirements that you’ll need to meet. Each lender is different, so while they all require similar eligibility requirements, some might be more flexible than others if you’re highly qualified. Requirements for Virginia Jumbo home loans are: 

  • A credit score of at least 720
  • A debt-to-income ratio (DTI) of 43% or less 
  • Verifiable income and employment 
  • Six to 12 months of cash reserves in savings
  • At least 20% for a down payment 
  • The property’s appraisal needs to be at or above the purchase price
  • The loan-to-value ratio (LTV), where you have 20% equity

Remember that VA jumbo loan requirements might be different. There are also options if you are a veteran, active duty military member, or eligible family member. Lenders also vary. You may qualify with a lower credit score or down payment.  It’s best to check with your lender for any additional requirements to secure this type of financing. 

Virginia Jumbo Loan Requirements

How Do I Qualify for a Jumbo Loan in Virginia?

Not everyone will qualify for a jumbo mortgage, but preparing yourself before starting the application process can help boost your chances:

Review Your Credit Report

Check your credit report and ensure everything is correct. If there’s incorrect information, work on removing it from your report before applying. 

Save for a Down Payment and Closing Costs

Your jumbo loan requires a substantial down payment, so make sure you’re setting money aside for that and closing costs.

Check Your Credit Score

While looking at your credit report, make sure your credit score is above the minimum requirement your lender asks for. Ideally, you’ll want it above 720, so work on improving it if necessary.

Lower your DTI

Most lenders are looking for borrowers with a DTI of 43% or lower. If your DTI is higher than 43%, work on paying off your debts and lowering your score so lenders find you less risky than other borrowers.

Build Cash Reserves

Lenders also want to ensure that you have enough money set aside to cover several monthly payments. Ideally, you’ll want to have six to 12 months of payments in savings. 

Gather Financial Documents

Take some time to gather and organize all the documentation you’ll need for your application. It could be items like your bank statements, tax returns, and proof of income.

Choose a Lender

Lastly, you’ll want to choose a lender that you can trust, has experience, and offers the type of home financing you want. F5 Mortgage understands jumbo loans and is prepared to help you secure funding.

How to Apply for a Jumbo Loan in Virginia?

If you’re applying for a jumbo mortgage, knowing what the process will look like is essential to a less stressful experience. The application process for a VA jumbo loan might look a little bit different, but it’s generally similar to a standard jumbo loan: 

  • Pre-Approval: Work with a lender, like F5 Mortgage, to determine the amount you’ll likely be approved for, ensuring you can search for properties within your budget.
  • Choose a Property: Select the property you want to purchase with your jumbo loan. 
  • Gather Documents: Collect all the documentation you’ll need for the application, such as income and employment verification, asset lists, and other financial information. 
  • Submit the Application and Documentation: Officially fill out and submit the loan application with your lender. Make sure everything’s correct before submitting. 
  • Appraisal: An appraiser will evaluate the property you want to buy to determine if the market value matches the amount you wish to borrow. 
  • Underwriting: The lender will go through the underwriting process, which involves reviewing your application and the home’s value, deciding on the loan terms, and drafting them.
  • Closing: If approved, you’ll review the loan terms and then sign all the required documents to officially close on your jumbo mortgage.

Virginia Jumbo Loan Limits

Unlike conforming loan limits, there isn’t a jumbo loan limit. The maximum amount of money you can borrow with a jumbo loan will depend on several factors: 

  • The property’s value
  • The property’s location 
  • Your financial profile, such as assets, credit score, and income
  • The mortgage lender’s policies

The limit for a traditional loan is $806,500, so any loan exceeding that amount is considered a jumbo loan in Virginia. In some cases, many lenders will allow buyers to borrow upwards of $2 million for their jumbo mortgage loan. The more you want to borrow, the stricter the lender can be with their eligibility requirements.

Virginia Jumbo Loan FAQs

Do Virginia jumbo mortgages require a higher credit score?

Yes. Unlike FHA loans, jumbo loans require a higher credit score than others. Most lenders want a score of at least 700 because of the higher loan amount and the associated risks.

What are the down payment requirements for a jumbo loan in Virginia?

Jumbo loan lenders will require a down payment, usually around 20% or more. Some lenders might need more depending on the loan amounts or be more lenient for highly qualified borrowers. 

How do VA jumbo loans differ from conventional jumbo loans in Virginia?

The main difference between VA jumbo loans and conventional jumbo loans is that anyone can apply for conventional jumbo loans, but only those within the military, veterans, or certain family members can qualify for VA jumbo loans.

Can you use a traditional VA loan for a jumbo loan in Virginia?

Yes, you can use a VA loan for a jumbo loan. These loans are for veterans, active duty service members, or eligible surviving spouses only and allow them to buy pricier properties without sacrificing the use of their VA benefits

What is the minimum credit score for a jumbo loan in Virginia?

Most lenders in Virginia require borrowers to have a credit score of at least 700 to qualify for jumbo loans. Some prefer higher scores, like 720, so they can offer more favorable terms, but overall, they look for higher credit scores due to the riskier nature of these loans.

Are interest rates higher for Virginia jumbo loans compared to conventional loans?

Yes, in Virginia, jumbo loan interest rates tend to be higher than those of conventional loans. That being said, they can be lower depending on the specific lender, borrower, and eligibility criteria.

What are the interest rates for jumbo loans in Virginia?

The interest rate for jumbo loans in Virginia varies depending on the borrower’s qualifications, the lender, and market conditions. Generally, they are between 5% and 7%. 

Can I refinance my jumbo loan in Virginia?

Yes, you can refinance your jumbo loan. There are a few options, such as rate-and-term refinancing and cash-out refinancing. The requirements for refinancing jumbo loans are similar to those of conventional refinancing.

Are there any specific lenders in Virginia known for jumbo loans?

Many national and regional banks provide jumbo loans in Virginia, but some specific local lenders, like F5 Mortgage, can assist with this type of financing.

What types of properties can be financed with a jumbo loan in Virginia?

With the new loan, you can buy properties, such as multi-family homes, single-family homes, townhouses, condos, and multi-unit properties with four or fewer units.

How does the application process for a jumbo loan differ from that of a Traditional loan in Virginia?

The application process for jumbo and convention loans differs because jumbo loan applications are generally more rigorous. Since lenders require much more documentation and information from the borrower, jumbo loans can take longer to obtain and qualify for than conventional loans.

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