VA HOME LOANS – BECOME A HOMEOWNER!
VA Loan Benefits: 100% Financing – No Down Payment – No Monthly PMI
VA Loan Benefits
VA Loans have many benefits that make it a great way for active and former service members to become homeowners. These benefits are designated for those who bravely served in the arm forces and for select military spouses.
VA Loans allow for Veterans to take advantage of substantial cost savings under qualification requirements designed specifically for service members of the military.
Whether you are a first-time homebuyer, or an experienced homebuyer, our team of VA Loan Experts is here to help guide you through every step of the way. We have helped many Veterans in South Florida become new homeowners. We have knowledgeable and experienced VA Loan Specialists that will help guide you through the loan qualifying process. Our goal is to make the process of obtaining your VA Mortgage Loan as easy as possible. Call us today to get start, we are ready to help you.
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VA Loan Frequently Asked Questions (FAQ)
Am I eligible to apply for a VA Loan?
Many people simply want to know whether they are eligible to apply for a VA home loan under the VA eligibility guidelines.Eligibility has to do mostly with duration of service. There are four important numbers to remember:2 — 6 — 90 — 181.The “2” is for those honorably discharged veterans and active duty personnel who have served two years on active duty. The “6” is for those in the Reserve/National Guard who have served six years. The “90” is for those who have served 90 days of wartime duty called up under U.S.C. Title 10. And, finally the “181” stands for 181 days of peacetime duty called up under U.S.C. Title 10. If you meet one of these criteria, you may be eligible for a VA mortgage. Now, there are certain other VA-eligible borrowers who may not fit so neatly into these categories, for instance, POWs held in captivity for 90 days or more, and certain surviving spouses who have not remarried. If you’re a surviving spouse, your military spouse must have died from a service-related injury or of a disability caused by a service-related injury. If you have questions about your own VA loan eligibility, you can get answers directly from a VA home loan professional.
Can I get a joint VA loan with someone?
On the topic of VA mortgage eligibility, many people wonder whether it’s possible to get a joint VA loan with a non-military person. This is not a simple yes or no question as there are several scenarios that apply. The first situation involves a legally married spouse of a veteran. Yes, the spouse can co-borrow on a VA home loan if occupying the home, and his or her income can be considered for qualifying purposes. The second concerns two members of the military. Whether married or unmarried, two military members can co-borrow on a VA loan if both will be occupying the home. Their entitlements are divided equally. The third scenario is when a military member brings an unrelated, non-military cosigner to the equation. In this case, the VA will only guarantee the veteran’s interest in the property. Most lenders consider these partial-guaranty loans too risky. Therefore, joint loans with non-military members might best be made with an FHA loan for some similar federally-backed benefits like a low down payment and relaxed qualifying standards.
Am I eligible for a VA loan as the spouse of a deceased veteran?
Let’s clarify surviving spouse eligibility for VA home loans. A surviving spouse who has not remarried is eligible to apply for the VA Loan Guaranty Program. The VA is very specific in defining the word “surviving”. A surviving spouse must be widowed by a veteran who died while in service or who died from a service-connected disability. In regards to POWs and MIAs, the VA has special rules for spouses. The spouse of a service person missing in action or of a prisoner of war is also eligible to apply for a VA mortgage. Remember, it’s surviving spouses, not children, who are eligible for the VA home loan benefit.
What types of homes are eligible for VA loan financing?
Many types of homes are considered “financeable” under the VA Home Loan Guaranty Program. And, there are certain guidelines a property must meet before it can be financed with a VA mortgage. Previously owned and new construction single family homes are eligible. They just need to be in good “safe and livable” condition as determined by a VA-approved appraiser. Condominiums and townhomes are handled a little differently. Lenders have access to a list of condominiums and townhomes, planned unit developments, and builders that are VA-approved. Homes on the list qualify for VA financing. If the home you want is not on the list, you can fill out paperwork and submit it to the VA to see if it qualifies. Finally, some manufactured homes are also financeable. They need to be classified and taxed as real estate, must be affixed to a permanent foundation, and must conform to building codes and zoning requirements. Certain types of modular homes may also be eligible. Even though VA guidelines allow for financing on these types of properties, individual lenders may not offer VA loans on all of them.
What’s the most I can borrow with a VA mortgage?
VA Mortgage amounts differ depending on a veteran’s entitlement and ability to pay. Let’s talk about entitlement first. Entitlement is the amount the VA will guarantee, and is usually 25% of the loan. Each veteran has basic entitlement of $36,000. This is for a loan of up to $144,000. Nowadays, many home values exceed that amount and the VA is sensitive to the current cost of living. This is where bonus entitlement comes in to play. Bonus entitlement is $68,250. When added to basic entitlement, each eligible veteran has $104,250 worth of entitlement for loans over $144,000 and up to $417,000 — even more in some U.S. counties where the cost of living is higher. Ability to pay determines how much entitlement can be used. In order for a mortgage lender to determine how much to lend, it’s necessary to first figure out what a borrower can afford to pay according to standards. Lenders will do a complete analysis of a borrower’s debt-to-income ratio, residual income, and credit to determine ability to pay.
Can I get a jumbo VA loan?
Like all VA home loans, a jumbo VA loan is available only to veterans with enough income to handle the house payments. A VA jumbo loan is one over $417,000. There are two types of these loans: those in counties where the conforming loan limit is $417,000, and those in counties where the conforming loan limit is higher than $417,000. The first one requires a down payment, and the second typically does not. The Fannie Mae/Freddie Mac conforming loan limits are set for each U.S. county individually, and there are certain high-cost counties where the limits are higher than standard. Your down payment for a jumbo loan is based on what the VA will guaranty, or in other words : entitlement. For instance, if you live in a county where the conforming loan limit is $417,000, but you want to borrow more than that, you can estimate the necessary down payment by using 25% of the loan’s overage. Let’s say you are buying a home for $600,000, and your county’s conforming loan limit is $417,000. The difference is $183,000, and 25% of that is $45,750 — which would be an estimate of your required down payment. Certain higher cost counties have higher conforming loan limits well above $417,000. In these counties, the VA guaranty covers the loan up to the conforming loan limit. Jumbo loans can vary from lender to lender.
What are the recent changes to VA limits and are they permanent?
Some people find it hard to keep up on VA mortgage limits because from time to time, the VA makes adjustments to the Program in response to circumstances dictated by the economy and other factors. In October 2008, the President signed the Veterans’ Benefits Improvement Act of 2008. The law allows the limit on zero-money-down loans in qualified counties to increase up to $729,750 on VA loans closed through December 31, 2011. In fact, the VA sets maximum loan amounts each year for each county. So, depending on where a veteran lives, the amount of the VA guaranty on the loan can vary. In recent years, the loan limit for most counties has been set at $417,000, but higher in some counties where it costs more to live. A super maximum VA loan of $1,000,000 may also be available for qualified borrowers.
What are the income requirements for VA loans?
Income qualifying for a VA home loan is a topic that gets asked about often. Like all loans, VA mortgages have certain qualifying requirements. These are established by the VA. The established debt-to-income threshold for VA loans is 41%. Typically, if a veteran’s monthly debt obligation is 41% or less of his income each month, then a lender can consider a VA home loan. Of course, there are other factors to consider like credit score and residual income. Residual income is what’s left over after subtracting all of a borrower’s foreseeable expenses from his or her monthly income. Often times, if there is enough residual income, debt-to-income can be higher than 41% for some borrowers. It can be a good idea to go through the pre-qualifying process with your loan officer. This will give you a gauge on your debt-to-income ratio and the amount you can qualify for.
Why do the VA and my lender have different guidelines for VA loans?
It can be very confusing to borrowers when they discover that their lender’s qualifying guidelines are different from the official VA home loan program guidelines published by the VA. Let’s discuss why this can happen. The Veteran’s Benefits Administration under the U.S. Department of Veterans Affairs establishes guidelines for the VA Loan Guaranty Program, but they don’t make the actual loans. Lenders such as banks, savings and loans, and mortgage companies put up the money for the loans. Many of these lenders have private investors who also set lending guidelines that may differ from those of the VA. So many lenders must follow both sets of guidelines to determine the terms of each loan. This is why you may, in some cases, find a lender’s criteria to be more strict than what’s outlined by the VA.
Can I borrow more than the value of my home with a VA loan?
Some borrowers wonder if it’s possible to take out a VA mortgage for more than the value of the home. A VA home loan can finance up to 100% of a new purchase. The VA will not guarantee borrowed funds that exceed the purchase price. A borrower looking to make immediate improvements on a property after purchasing can look in to obtaining a second mortgage or HELOC if the home appraises for more than the amount for which it was purchased. VA guidelines allow a borrower to refinance for up to 100% of the home’s value, as determined by an appraisal of the home’s current value. This means that a borrower can take cash out, up to the value of the home. On a VA streamline refinance, otherwise known as an IRRRL, a borrower can refinance the entire current mortgage into a new mortgage with a lower rate and/or lower payments. An appraisal hasn’t typically been required for this type of refinance, so borrowers have been able to take advantage of lower rates even if they owed more than the home was worth. However, in a declining housing market, lenders may require an appraisal on this type of loan to ensure the home’s worth is in line with what’s being borrowed
What rate can I get on a VA loan?
For many borrowers, the number they are the most concerned with on their loan is their interest rate. VA mortgage rates, like any mortgage rates, can change on a daily basis. The VA mortgage interest rates tend to move up and down with conventional loan rates. Typically, VA borrowers can expect VA loan rates to be close to the nationally posted conventional rates. The interest rates offered to VA borrowers by a lender can change daily, or even more than once on a given day. This is why advertised rates are almost always subject to change. The VA does not set the rates on any home loans. If you want to know what rates are right now for a particular VA loan program, your most up-to-date information will come from speaking to a lender directly.
Are there fixed and adjustable VA rates?
Both fixed rate and adjustable rate mortgages are possible under the VA mortgage programs. But not all lenders offer ARMs. Fixed rate VA loans have an interest rate that is permanent for the duration of the loan. Adjustable rates generally start out lower than fixed rates, and can adjust either up or down during the life of the loan. Determining whether a fixed or adjustable rate mortgage is right for you often depends on how long you plan to own the home
How are VA rates determined?
The VA does not set the rates on any home loans. VA mortgage rates, like most mortgage interest rates, change often. The VA and FHA loan interest rates typically move up and down along with conventional loan rates, and borrowers can expect VA home loan rates to be close to average conventional rates. What’s important to understand is that mortgage rates for VA home loans are determined by the market. They are not set by the U.S. Department of Veterans Affairs, although the Federal Government’s actions can, of course, affect mortgage rates. Most lenders have a current rate sheet that their loan officers work from that tells them which rates they can offer, and the cost of each rate. The rate options discussed with a borrower often depend on the borrower’s priorities, which might be the lowest possible payment, or keeping the cost of the loan low. The amount of time the borrower intends to stay in the home can also be an important factor in deciding which rate option to choose.
How does my credit score affect my VA loan interest rate?
Since, in many conventional loan programs, the rate you can receive is directly tied to your credit score, many VA borrowers wonder if the same is true of VA loans. The VA home loan program doesn’t provide for a tiered rate structure based on credit score. As far as the VA is concerned, anyone who qualifies for the program is eligible for the best rate available. Individual lenders and investors– the ones actually lending the money—may or may not build in their own pricing differences to offset risk. But generally speaking, your credit score typically won’t affect your rate on a VA home loan like it can with other conventional programs.
How does assuming a VA loan work?
One of the great features of the VA mortgage program is that loans are assumable with credit qualification. When a VA borrower sells a home to another VA-eligible borrower, often times the loan can be assumed. VA home loan assumption can happen two ways. The seller can allow his or her entitlement, originally used to acquire the VA loan that is being assumed, to be used by the buyer. In this scenario, the seller will be unable to restore this entitlement until the buyer pays the loan in full. Another scenario is for the VA buyer to substitute his or her own entitlement for the seller’s in order to assume the loan. This allows the seller to restore entitlement immediately to use on another VA mortgage if he or she wishes. Of course, appropriate VA forms would need to be completed for entitlement to be restored. Whether entitlement is replaced or not, a VA loan can only be assumed by another VA-eligible borrower.
When someone assumes my VA loan, is my name removed from the loan?
The burning question many have about VA loan assumption is whether the seller’s name is removed from the loan after closing. The simple answer is YES. When a VA mortgage is assumed, the original borrower’s name is removed from the loan and the seller’s name is replaced with that of the buyer’s. The buyer then assumes responsibility for making payments. And, the seller’s credit is no longer tied to the loan.
Can I get a VA loan if I have bad credit?
Many VA-eligible borrowers wonder whether bad credit might be a deal breaker in qualifying for a VA loan. Lenders look at several factors when deciding whether a borrower is qualified for a VA mortgage. For those with a history of bad credit, a common assumption they may have is that their credit isn’t good enough to qualify for a VA loan. Lenders consider debt-to-income ratios, residual incomes and loan histories, as well as complete credit histories and FICO scores. Credit requirements for VA home loans can vary from lender to lender. If it turns out your current credit situation is preventing you from getting a veteran’s home loan, then your loan professional can help you understand the problem areas in your credit history that need improvement. Strategies like paying your debts on time, paying off or paying down credit cards, or selling a car and paying the loan in full can make a noticeable difference in your FICO score.
How does a prior bankruptcy affect my ability to qualify for a VA loan?
In the case of a prior bankruptcy, the VA guidelines are specific. If a borrower has filed Chapter 7, then he or she cannot qualify for a VA loan for at least two years after the discharge date of the bankruptcy. The borrower will need to explain the circumstances under which he or she filed Chapter 7. And, he or she must have re-established satisfactory credit and have stable income that qualifies. If a borrower has filed Chapter 13, and is still paying the debt, he or she may still be considered for a VA home loan as long as the payments to the court have been made consistently for one year. A court trustee may need to give written approval. The borrower may also need to explain the circumstances under which the bankruptcy was filed. And, like Chapter 7 filers, a borrower in Chapter 13 must also have re-established good credit and have a stable job. Lenders can require a longer waiting period, such as three or more years after discharge, for any type of bankruptcy.
Who decides if I qualify -- the VA or my lender?
When it comes to approving or denying a VA loan application, many ask whether this is up to the Department of Veterans Affairs or to the VA-approved lender. Ultimately it’s the lender that determines if it is willing to make a VA loan. In order for the loan to qualify for the VA Home Loan Guaranty, the loan must meet the VA’s requirements. But a lender may have its own requirements in addition to what the VA outlines. Most lenders use an automated underwriting system that allows them to input borrower data into a computer program that can quickly help determine whether a borrower is qualified according to VA standards.
What fees will I be charged with a VA home loan and how much cash do I need?
Often, the fees associated with VA loans and the cash needed to close are a big question for VA borrowers. Knowing what to expect can make the process easier. To obtain a new VA loan, most VA eligible-borrowers can expect a VA required funding fee that could be paid or financed. Also, there is likely to be a credit report fee, VA-approved appraisal fee, compliance inspection, and VA lender origination fee. Other fees can include rate-reduction points, prepaid taxes, assessments and insurance, hazard insurance, flood zone determination, survey, and closing costs that could include title examination and insurance, recording fee, and mailing and/or wire fees. Many of the fees associated with VA loans can be included in the loan as long as the total amount doesn’t exceed the conforming loan limit for your county. The seller might agree to pay the VA borrower’s closing costs up to 4% of the purchase price; therefore, there may be no need to bring cash to closing. For a VA refinance, the VA funding fee is required unless it’s waived. But the fees associated with a refinance are often less than a new purchase. As examples, a VA streamline refinance has a lower VA funding fee, and may not require an appraisal.