VA Jumbo Debt Consolidation Loan
On a normal VA loan, a borrower is only allowed to borrow up to $417,000 nationwide. However, the VA understands that $417,000 may simply not be enough, and having to deal with two mortgages on a more expensive home defeats the purpose of providing the VA loan benefit. This is why the VA allows for “jumbo” loans, which give the borrower the opportunity to exceed the $417,000 limit. This “jumbo” option can be used for the VA Debt Consolidation loan to pay off other debts and credit cards, or even to just get cash.
The VA Debt Consolidation Loan is a type of refinance that the VA offers where the borrower can essentially get cash-out to pay off other types of debt – particularly credit card debt. This allows the borrower to pay off their debts, maintain good credit, and ease their financial burden – often without dramatically affecting their monthly mortgage payment. The amount of cash you can get out of the VA Debt Consolidation Loan depends primarily on the value of your home and much of it you’ve paid off so far.
Getting a Debt Consolidation Loan has helped many home-owners ease their financial burden and improve their quality of life. For example, $10,000 seems like a lot of money, especially if that’s how much credit card debt you have, but in a mortgage, $10,000 is very little, often less than 1/20th of the amount of the loan. By taking that $10,000 off of credit cards and putting it into your mortgage, you’ll raise your mortgage payment by very little and completely get rid of a large credit card payment. That is just one scenario out of many great options for consolidating debt.
Getting approved for a Debt Consolidation loan involves evaluation of your income, your credit, and the current value of your home. It’s typical for lenders to require income verification and a credit report in order to make sure you meet the requirements for income and credit. To determine the current value of your home, another official VA appraisal of the home will need to take place. As long as those requirements are fulfilled, you should be able to use cash out from your home to pay off other debt.
Combining multiple loans into one home loan has numerous benefits including:
- Lower overall monthly payments
- Lower overall interest rates because you can get rid of high-interest credit card payments, car loans, and even second mortgages
- The interest on home loans is tax deductible, while interest on credit cards and car loans is not.
- Simplification from only having one monthly payment to one lender instead of multiple payments to various companies
If you are in a position where you could benefit from consolidating higher-interest debt into your mortgage, this option can take much of the financial burden off your shoulders and help make your payments far more manageable. Contact us today to learn more about the program.