Buying a Home is a big deal, one of most important events and decisions in a person’s financial life. There are probably a hundred questions to be answered about securing a loan for that new home. For military veterans and current service members wanting to exercise their VA home loan entitlement, several questions come to the front as they ramp up for this big event.
You might be surprised at how easy it can be to get your veterans mortgage financing. VA mortgage interest rates are still at historic lows.
Q. What can I use the VA-guaranteed loan for?
A. To buy a home, either existing or pre-construction, as a primary residence, or to refinance an existing loan.
Q. What are the benefits of a VA-guaranteed loan?
A. This is going to require a list!
- No down payment (unless required by the lender or the purchase price is more than the reasonable value of the property)
- No mortgage insurance
- Equal opportunity for all qualified Veterans to obtain a VA loan
- One time VA funding fee that can be included in the loan
- Veterans receiving VA disability compensation are exempt from the VA funding fee
- VA limits certain closing costs a veteran can pay
- Can be assumed by qualified persons
- Minimum property requirements to ensure the property is safe, sanitary, and sound
- VA staff dedicated to assisting veterans who become delinquent on their loan
Q. Who is eligible for a VA home loan?
A. Generally, the following people are eligible:
- Veterans who meet length of service requirements
- Service members on active duty who have served a minimum period
- Certain Reservists and National Guard members
- Certain surviving spouses of deceased veterans
Other people are also eligible. Check eBenefits or contact the VA Eligibility Center at 1-888-768-2132.
Q. What are the underwriting requirements?
A. Here are some of the principal requirements:
- No maximum debt ratio; lender must provide compensating factors if debt ratio is over 41%.
- No maximum loan amount; however, VA limits its guaranty to $417,000 without a down payment in most of the country.
- Published residual income guidelines to ensure Veterans have the capacity to repay their obligations while accounting for all living expenses.
- No minimum credit score requirement; instead VA requires a lender to review the entire loan profile to make a lending decision.
- Complete VA credit guidelines are published at www.benefits.va.gov/warms/pam26_7.asp .
Q. How do I get the process started?
A. Start by downloading the required forms.
VA provides policy, guidelines and oversight of the program. Lenders provide financing for eligible Veterans. The guaranty allows Veterans to obtain a competitive loan without a downpayment. Lenders need a Certificate of Eligibility (COE) to prove your entitlement. Most Veterans can obtain the COE online through eBenefits (www.ebenefits.va.gov). Lenders also have the ability to request the COE on your behalf.
The VA appraisal is not intended to be an “inspection” of the property. Get expert advice from a qualified residential inspection service before legally committing to a purchase agreement. Veterans are also encouraged to have radon testing performed.
Q. Is there any possibility of getting a VA loan if I’m having trouble on my current mortgage?
A. VA loan technicians are trained to help Veteran borrowers retain their homes and avoid foreclosure. You can call toll-free 1-877-827-3702 to speak to a VA loan technician.
If you have questions concerning your military qualifications for a VA mortgage loan, you can contact the VA directly. For those living in the Intermountain West and Pacific Northwest, the VA Regional Loan Center is in Denver. Here’s how to contact them:
Department of Veterans Affairs
VA Regional Loan Center
155 Van Gordon Street
Lakewood, CO 80228
(Mail: Box 25126, Denver, CO 80225)