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If you’re looking at buying the Orange County home of your dreams – and the price reflects it – then a VA jumbo loan may very well be the best option for your mortgage.

In most veteran VA loan scenarios, the VA guarantees up to 25% of the total amount of the loan up to the VA loan limit in your county – which, in much of the US, is $417,000. But in Orange County, CA the 100% financing limit is $700,000. That is a high limit and will surely purchase a beautiful home, but what if you can afford more?

But what happens when the value of the loan exceeds the Orange County $700,000 loan limit for 100% Financing?

This is where the Orange County, CA VA jumbo loan come into the picture.

For the purposes of this example, let’s say that you would like to live near the beach, where home prices can easily be higher than $1,000,000. You find the perfect house for you and your family, and it’s selling for $1,100,000, which is $400,000 over the Orange County 100% VA financing limit.

You decide that you would like to use your hard-earned veteran benefits to take out a VA mortgage!

The U.S. Department of Veterans Affairs mandates that on jumbo loans above the 100% financing county loan limit, the borrower put down 25% of the difference between the cost of the loan and the applicable county VA loan limit.

Continuing on with our VA jumbo loan example from above, 25% of $400,000, $100,000 would be required as a down payment.

Not bad at all! In this example you’re buying your $1,100,000 luxury Orange County home for only $100,000 down in addition to the required closing costs. Better yet, you are getting a low 30 year fixed rate. Your rate will be at least 1% lower than a non-VA borrower would get for a $1,000,000 loan.

The real value of VA jumbo loans is apparent when you compare and contrast it to the standard down payment requirement of a conventional or in this case, a Portfolio Jumbo loan mortgage, which is typically 20% down. And again, that low 30 year fixed rate.

This means that for the example of a $1,100,000 Orange County house, a conventional loan down payment would be $220,000 (at the minimum) while a VA loan down payment would only be $100,000. That’s less than half of the down payment required for the conventional loan in this scenario!

Please keep in mind while house shopping that VA county loan limits vary widely throughout the country and will be higher in areas with especially high property values. Once again, the Orange County VA county loan limit is $700,000, but it’s smart to check with your local Orange County VA mortgage Loan Expert prior to looking at houses. Many parts of California max out at $417,000.

For example, as of 2011 the VA county loan limit for Marin County is $1,000,000! San Francisco County has a loan limit of $1,000,000 as well.

To check the Southern California VA loan limits, click on the blue link. To check what the VA county loan limits are for each county in the United States, you can visit the U.S. Department of Veterans Affairs at their loan limit website. For counties that are not listed on the website, the official California VA loan limit is automatically set at $417,000.

Why is there such as large difference in county loan limits throughout the nation? In short, because the various housing markets across the country vary greatly.

In San Francisco a small single-family house may sell for $1,000,000, while in other places you might be able to find a similar house for $100,000!

Wherever you are, if you are in need of a substantial home loan, a VA jumbo loan is certainly worth checking out. Especially while the Orange County 100% VA Loan limits for 2011 are still in place.