Will VA Loan Limits Increase in 2020?
The cost of homes is rising across the country and doesn’t really show signs of slowing down. The more people interested in buying a house, the more money sellers can ask for their properties. For buyers looking to use a VA home loan to finance the purchase, those rising prices could spell trouble. Luckily, it seems that the VA has increased the limits on VA loans to better accommodate those rising prices.
The 2019 Maximum
In 2019, borrowers were limited in how large of a loan they could take out through the VA home loan program. The maximum amount was $484,350 in most instances. This is dependent on where the home was located. In some cities where the average home price was significantly higher, the VA made exceptions.
The 2020 Maximum
In 2020, the VA home loan maximum is largely a thing of the past for borrowers living in high-cost areas. This means the VA will guarantee loans for homes that cost more than $484,350 without a problem.
What This Means for Home Buyers
For home buyers using a VA loan to buy their first house, this means your options are significantly larger than they would have been in 2019. You’re able to look at a wider selection of houses and are only limited by what you can reasonably afford to pay each month. For home buyers with a previous VA loan, the limits may still apply. Your mortgage broker will be able to help you understand your options.
Lenders Can Still Have Other Requirements
Keep in mind that the elimination of the VA loan limit doesn’t mean that you can buy the most expensive house you can find. Lenders can still require you to reach certain income levels or have other restrictions in place to determine whether you qualify for a loan in excess of $484,000. Remember, just because you can borrow that full amount doesn’t mean you have to or that you should.
Get Into Your Dream Home
If you’re ready to take advantage of a VA home loan, don’t wait. Get pre-qualified online and get your home search started off on the right foot.