What is a VA Loan?
The VA home loan is a benefit provided by the Veterans Administration. The Benefit is for eligible active duty veterans and select military spouses. In Fact, the zero down payment mortgage has many benefits for primary home buyers. The program started in 1944 to help returning WW2 veterans to buy a home with no money down. Most importantly, the VA loan is the only loan other than USDA that provides zero down payment mortgage. The U.S. Department of Veterans Affairs guarantees lenders making the loans against losses should the borrower default. As a result, private lenders like banks, credit unions, and mortgage brokers originate zero down payment loans with less risk.
VA Loan Alternatives
If a VA loan is not for you, other programs may be better. Additionally, USDA, 3% down payment Conventional, FHA, Fannie Mae HomePath and Freddie Mac Home Ready may fit your needs. Call CharterStone Mortgage today to help guide you to the loan that is best for you. Most importantly, get pre-approved before shopping for your home.
What are the Benefits of a VA Loan?
- Zero Down Payment
- No Debt to Income Ratio Maximum limits
- No monthly Mortgage Insurance
- Sellers can contribute up to 4% of the Closing Costs
- Lower Monthly Mortgage Payment
- Less Stringent Qualifications
- Loan limits Same as Conventional
- VA Jumbo Loans Available
What are the Eligibility Requirements for a VA Loan?
Veterans, active duty. National Guard and reservists must meet minimum service requirements. The Department of Veteran Affairs sets the requirements. In addition, select spouses of military members who died while on active duty may be eligible. How do get a Certificate of Eligibility-COE? An applicant can go online at the VA benefits portal, contact a lender that will assist with the process or mail in a form 26-1880. In addition, gather your DD-214 form.
What are the Qualifications for a VA Loan?
Home buyers are not required to have an income level for the loan amount applied for. However, some lenders will limit the total DTI to 50% or less. Additionally, the VA requires a certain amount of net income remaining after paying certain monthly living expenses. More importantly, lenders set additional income credit and debt requirements over the minimum VA guidelines. CharterStone Mortgage can provide some of the least stringent VA loan options. Call today to find out more.
- Credit Qualification Requirements
- Credit score of 620 or above
- Primary residence only
- No foreclosure, short sale or Chapter 7 bankruptcy in the last 2 years
- 1 year since Chapter 13, no wait time after dismissed
What is the VA Funding Fee?
The VA funding fee is a government fee charged as a percentage of the loan amount. The fee added to the loan amount is not an out of pocket cost. The fee is going to the Department of Veterans Affairs as a form of mortgage insurance to help cover the guaranteed losses to the lender should the loan default. In fact, the current percentage for a purchase loan is 2.15% of the loan amount. Consequently, the amount changes depending on eligibility. In addition, the fee can be waived for disability. Most Importantly, the COE will determine the requirement.
How to Apply for a VA Loan
A VA loan is the same process as a traditional home loan. Apply online, in person or on the phone to a bank, credit union or with CharterStone Mortgage. The process takes 20 to 30 days to complete. Many people believe the process is longer. This was the case many years ago, however, the industry has changed. A VA Home loan does not take any longer than a conventional or FHA loan. In Addition, you should prepare in advance by getting the Certificate of eligibility and a copy of your DD-214.
VA Refinance IRRL
A veteran may refinance the mortgage with no appraisal or credit considered in the decision for approval. In addition, out of pocket expenses are not required. Without exception, this is one of the fasted loans to refinance. The refinance must be a VA To VA, a COE not required, and cash out is not allowed. Additionally, the occupancy requirement is that you only need to certify that you previously occupied the home. In other words, if the home is now rented, you may refinance to a lower rate VA mortgage payment