Do I qualify for a Veteran loan if I have a bankruptcy?

That is a great question and the short answer is Yes. If you are currently in the middle of a Chapter 13 bankruptcy, you must receive written authorization from the bankruptcy trustee and be able to show 12 months of clean payment history to move forward with any Veteran loan. A Chapter 7 bankruptcy must be discharged for at least two years prior to application for any Veteran loan.

Where did the Veteran loan come from?

In 1944 President Franklin D Roosevelt established the Veteran loan when he signed the GI Bill. This bill provided veterans the opportunity to purchase a home with no down payment. Through the Veteran Loan, the dream of homeownership became a reality. The GI Bill and the Veteran Loan, arguably contributed more to the welfare of veterans and their families than any other government program.

Who can get Veteran loan?

A Veteran loan can be established by any one of the 25 Million plus men and women who have served in the branches of the US military. Those eligible for a veteran loan have served honorably in the armed forces for 181 continuous days during times of peace at least or 90 days during war time. Those officers and enlisted personnel on active duty who have at least two years of service time are also eligible for a Veteran loan. Under some specific guidelines the widows of veterans are also eligible to use a Veteran loan. Provided they have met the six-year service requirement, members of the National Guard and reserve units may also establish a veteran loan.

How much does the VA guarantee?

The maximum guarantee on a veteran loan is $104,250 (and higher in some areas of the country. For example the county loan limits in Alexandria, VA are $825,000.) As such a veteran should not be considering a home valued at more than $417,000 unless they reside in a county where the loan limits are higher. This being said, the VA is only the guarantor on the loan and not the lender itself. Thus, a Veteran loan is subject to approval by the individual lenders who may have different requirements for eligibility. In recent months many of the banks and lending institutions that have previously lent money for Veteran loan are now refusing to do so, or have altered their internal guidelines such that they make approval more complicated, increasing the need for licensed and certified loan officers who focus on Veteran loan.

Is the Veteran loan at a fixed rate?

A Veteran loan can be established at fixed rates, however not all are. A Hybrid Veteran loan, for example is fixed for a period of time and adjustable after the fixed period. A veteran loan can also be a fixed rate as well. If a fixed rate is what you want, make sure that that the final paperwork indicates a fixed rate loan.

How do I qualify for a Veteran loan?

The qualification process for a Veteran loan is very straightforward. In general a veteran loan cannot be used for a second home or rental property. If you are a current member of the military or qualified veteran (your DD-214 can provide the necessary information to satisfy this), and you plan on inhabiting the home as your primary place of residence, you qualify for a Veteran loan

Will my credit be pulled For a Veteran loan?

Although the Department of Veterans Affairs does not provide guidelines for Veteran loan with regards to credit, your credit does matter.  The lenders offering the loans generally do have credit qualification requirements. Credit requirements on a Veteran loan much more relaxed than their conventional counterparts.

What sort of interest rates can I expect on a veteran loan?

Although, there is no straight forward answer as interest rates are constantly changing and are determined by market forces, In general the rates on a veteran loan and a conventional loan are very competitive. A Hybrid Veteran loan can generally be found at the lowest rates, with more traditional fixed rates floating in a range similar to those of conventional loans.

What are Hybrid Veteran loan?

The Hybrid Veteran loan was established to give the stability of a more traditional fixed rate mortgage and the flexibility of an ARM. A Hybrid Veteran loan generally starts at rate that is much lower than that of its fixed counterparts. Hybrids keep this low fixed rate for a shorter period of time, usually either three or five years. After the fixed period has elapsed hybrid Veteran loan adjust to the current market. This adjustment is made with very strict rules governing it. Unlike the pay-option ARM products that helped to collapse the mortgage market, Hybrid Veteran loan may only adjust once per year as opposed to quarterly. There are also specific caps in place so that the interest rates do not run away on the veteran. For example on Hybrid Veteran loan the annual adjustment cannot be more than 1% in any given adjustment period, and hybrid Veteran loan have a life time cap on adjustment (usually 5-6% above the start rate). With these safeguards in place hybrid Veteran loan are a great option for may veterans.