This guide covers VA guidelines versus overlays during the pandemic economic crisis. It is no secret that qualifying for a mortgage is more difficult during this COVID-19 coronavirus outbreak. If you have been following the news at all, you understand the doom and gloom going on throughout the world. While views are starting to differ throughout the nation, one thing remains the same, mortgage lending has been disrupted in numerous ways. A VA loan has been affected throughout the industry. In this blog, we will detail how to obtain a VA loan during the COVID-19 coronavirus outbreak, and some changes to the VA mortgage lending practices. In this breaking news article, we will discuss and cover VA Guidelines Versus Overlays During The Pandemic Economic Crisis.
Changes In VA Guidelines Versus Overlays During The Pandemic Economic Crisis
Changes in VA mortgage lending. VA RENOVATION LOAN: We were not currently able to offer VA renovation mortgages during the pandemic economic crisis.. Gustan Cho Associates have a very unique VA mortgage program. This loan program allows a veteran to borrow additional money to complete up to $50,000 of renovations and upgrades when buying or refinancing a property.
We do feel this is temporary, and this product will be available again once the pandemic is over. This is a great way to build equity in the property.
We feel this loan product will be available again as states and local governments start to open, and permits are easier to obtain. Construction crews will not be as limited on the scope of work after this epidemic is over. Small changes like these should allow this renovation product to be available once again.
VA Guidelines Versus Overlays During The Pandemic and Turnaround Times
Underwriting turn times. Underwriting turn times on VA mortgages have seen a significant increase. This holds especially true on manual underwriting files. During the beginning of the pandemic, we saw interest rates fall, creating a mini refinance boom, slowing down underwriting turn times across the board.
Current turn tires for manual underwriting can be as high as 15 business days. This is important to understand before you put an offer in on a property.
You will more than likely want to ask for a 45-day closing if utilizing a VA loan to purchase your property. Current mortgage volume is at near capacity which is slowing down the loan process. We hope to see this get back to normal in the near future, but for now, extended turn times seem to be an industry standard.
VA Guidelines Versus Overlays During The Pandemic on Manual Underwriting
VA MANUAL UNDERWRITING is still available: VA manual underwriting is a staple of Gustan Cho Associates. We are experts when it comes to manually underwrite mortgage loans. There is good news during this COVID-19 coronavirus outbreak, Gustan Cho Associates are able to offer VA manually underwritten loans. This is great news while the majority of lending institutions are no longer allowing VA loans to be manually underwritten.
Key Bullet Points on VA Guidelines Versus Overlays During The Pandemic on Manual Underwriting
If your VA loan must be a manual underwrite, here are some key qualification checkpoints: An underwriter is looking for a clean 12 months of all on-time payments and no non-medical collections reporting on your credit report. If you do have late payments reporting on your credit report in the last 12 months, your file will be significantly harder to approve.
You will need some sort of documentation to justify your late payments, such as documenting a hospitalization. You will also want to have as much money in the bank as possible, at least one month of PITI after your closing costs.
It is important to remember; you can ask the seller to pay up to 4% of the purchase price to cover closing costs. You will need to have one month of a mortgage payment as reserves even if the seller is paying your closing cost. For more information on VA manual underwriting, please call Mike Gracz at (800) 900-8569 or send an email to gcho@gustancho.com.
Mortgage Forbearance During Coronavirus Pandemic Economic Crisis
If you already have a VA mortgage and are not able to make your payment due to COVID-19 coronavirus, you should reach out to your mortgage servicer as you could qualify for mortgage forbearance. As part of the CARES ACT, forbearance is available for up to 180 days with a possibility of extending for an additional 180 days. The U.S. DEPARTMENT OF VETERANS AFFAIRS has put together a nice coronavirus relief checklist to help veterans understand their options during these unfortunate times. If you are on the verge of missing a mortgage payment, you want to act as soon as possible. It is still possible to damage your credit score significantly during this outbreak.
Please see THIS LINK to the VA website for more information.
The CARES ACT
Under the CARES ACT, if you were current on your mortgage before entering the COVID-19 forbearance, you should not be marked late on your credit score. It is important to keep any and all documentation surrounding the forbearance just to have documents to rely on if you were reported to the credit bureaus. A late mortgage payment will significantly lower your credit score. You would want to have any and all documentation to get any illegitimate late payments removed.
Lenders Who Go Off VA Guidelines Versus Overlays During The Pandemic
Applying for a VA mortgage loan with Gustan Cho Associates is very simple. We do our best to streamline this process for our veterans. First you will gather the following documentation:
- Last 60 Days Bank Statements – to source money for escrows
- Last 30 Days Pay Stubs
- Last Two Years W2’S
- Last Two Years Tax Returns
- Driver’s License
- Certificate of Eligibility
Starting The Mortgage Process
Once you have your documentation gathered up, please call Mike Gracz on (800) 900-8569. You will have a brief mortgage consultation with Mike and go over your VA qualifications. You will then be paired with a licensed loan officer in your state and an application link will be sent to you.
After you fill out the online application, you can email or upload your supporting documentation from above. From there, your loan officer will work backward and calculate your income and see exactly what you qualify for.
If for some reason you do not qualify for a VA loan today, your loan officer will come up with a customized plan which will allow you to qualify as soon as possible. Utilizing your VA loan benefits is something you should take advantage of. We work with many veterans for over a year before they qualify for the home best suited for their families.
Qualifying With a Five-Star Lender With No Overlays
Even before the COVID-19 coronavirus outbreak, about 80% of our clients were turned down for a mortgage by their current mortgage lender. We do not have LENDER OVERLAYS on our VA mortgage products and are able to help more clients than most lending institutions. So even if you have been turned down in the past, please give us a call today. We are available seven days a week to answer your mortgage questions. Feel free to call Mike Gracz directly at (800) 900-8569 with any VA mortgage questions. We look forward to helping you and your family buy the home that’s perfect for you.
