FAQ on VA Loans on Eligibility and Mortgage Options

This blog will cover the FAQ on VA loans, eligibility requirements, and VA mortgage loan options for first-time homebuyers. There are many FAQs on VA loans regarding qualification, credit, eligibility requirements, and the types of VA loan programs that our viewers often inquire about.

VA loans are the best mortgage loan program available in the United States. There are no down payments or monthly insurance requirements.

However, only veterans of the U.S. Military with a Certificate of Eligibility (COE) can qualify for VA Loans. This article will cover the credit/income requirements and general eligibility guidelines for VA purchase and refinance loans. We will also review the various mortgage options for VA loans, such as VA cash-out refinance and VA streamline refinance (IRRRL).

Eligibility and Mortgage Options FAQs

Find out about VA loans, such as eligibility, key benefits, and mortgage options. This article addresses the general VA home mortgage queries that veterans and armed forces personnel ask.

Backed by the Department of Veterans Affairs (VA), VA loans have flexible terms, no down payment requirements, and low interest rates. There is no question that a VA loan is a prudent choice for refinancing or buying a home. It comes with some of the biggest benefits military veterans have and extends to their eligible spouses. It is common to have queries about these loans, which is why this guide, VA loan FAQs, and mortgage options are provided.

VA loans are mortgages that the government guarantees to military members at affordable prices to promote homeownership. These loans are unique from the other loan types as borrowers are not required to pay Private Mortgage Insurance (PMI), and some lenders allow the borrower to pay no down payment.

Some of the benefits of the VA loans include the following;

• No down payment is required in most scenarios.
• Unlike traditional loans, the interest rates are lower.
• No private mortgage insurance is needed.
• Credit terms are lenient.
• One-time VA funding fee (with some exemptions for disabled veterans).

VA Loan Eligibility FAQs

Who is Eligible For a VA Loan?

You may qualify for a VA home loan if you are:

• An active-duty service member with at least 90 days of continuous service.
• A veteran who meets minimum service requirements.
• A National Guard or Reserve member with sufficient service time.
• A surviving spouse of a service member who died in the line of duty or died due to a service-related disability.

Do I Need a Certificate of Eligibility (COE)?

• Yes.
• The VA loan program requires a certificate of eligibility.
• Lenders can normally electronically pull one, or you can go to the VA site and request one.

What Are the Minimum Service Requirements?

• Wartime service: At least 90 days of active duty.
• Peacetime service: At least 181 continuous days.
• National Guard/Reserves: At least 6 years of service, unless you get called to active duty earlier

Can surviving spouses apply for VA loans?

• Yes.
• Surviving spouses who are otherwise eligible can benefit from VA loan programs.
• However, certain requirements must first be satisfied, such as not remarrying before age 57.

VA Loan Mortgage Options

What types of properties can I buy with a VA loan?

VA loans can be used to buy the following:  

• A site-built single-family home.
• A multi-family dwelling unit (4 or fewer, with owner-occupancy of one unit).
• A manufactured home (with certain restrictions).
• A condo in VA-approved buildings

Can I use a VA loan to refinance?  

Yes, refinance options include:  

• VA Interest Rate Reduction Refinance Loan (IRRRL): To lower the Interest on a loan or change a loan from an adjustable to a fixed rate mortgage.
• VA Cash-Out Refinance: Refinancing to a VA loan from a non-VA loan, or tapping into home equity.

Can I get a VA loan for a second home or investment property?  

• VA loans are for primary residences only.
• However, you can buy a multi-unit home and live in one unit while renting out the others.

Do VA loans have loan limits?  

• There are no loan limits, although lenders may set limits based on certain factors, like your financial status or entitlement.
• In many situations, a veteran with full entitlement can get a loan above the conforming loan limit, with no down payment or restrictions.

FAQs on VA Loan Benefits  

Are there any credit requirements for VA loans?  

• While VA loans are less stringent than conventional ones, most lenders prefer a minimum credit score of 620.
• Our loans, however, do not require a minimum score.

What is the VA funding fee?  

• The VA funding fee is a singular fee that provides funds to maintain the program.
• It fluctuates based on your loan type, service category, and the down payment.
• It is waived for veterans with service-connected disabilities.

Are VA loan benefits reusable?  

• Yes, people are allowed to use their VA loan entitlement unlimited times.
• You regain your full entitlement if you pay off and sell the property.
• The unmatched VA benefit, with no down payment, competitive rates, and less stringent loan requirements, makes it the most reliable mortgage for helping people gain home ownership.
• Knowing the VA loan eligibility requirements and the mortgage options available makes it easier to finance your next property.

FAQs  

How, if at All, Does a VA Loan Interact With Other Financing Programs?

• A VA loan may be used with some state and local first-time homebuyer funds.

Are VA Appraisals Stringent?

• VA appraisals are done to ensure the property is safe, sound, and sanitary.
• They are detailed but not necessarily more complicated than standard appraisals.

Is There a Limit to How Many Times I Can Use My VA Loan Benefit?

• No.
• You can use the VA loan benefit multiple times if you restore the entitlement.

Can I Use a VA Loan if I Already Own a Home?

• Yes.
• You can have multiple VA loans simultaneously, but many entitlement restrictions can limit this.

Do VA Loans Take Longer to Close?

• Not usually.
• VA loans can close simultaneously with conventional loans, especially with other experienced VA-approved lenders.

FAQ on VA Loans: Mortgage Rates versus Other Loan Programs

Mortgage rates on VA loans are probably the lowest of all mortgage loan programs. This includes lower than Conventional loan mortgage interest rates. Unfortunately,

VA loans are only available to Veterans of the United States Armed Forces with a Certificate of Eligibility and an honorable discharge.

Eligibility for VA Loans is one of the greatest benefits offered to veterans who served in the United States Armed Forces. The Department of Veterans Affairs (VA) oversees mortgage lending guidelines for VA Loans but does not originate or fund them.

What Is The Veterans Administration’s Primary Role In The Mortgage Market

The U.S. Department of Veterans Affairs (VA) creates and launches lending guidelines on VA loans.

VA is the federal government agency that sets credit/income standards, loan limits, appraisal requirements, AUS algorithms, and agency mortgage guidelines on VA loans.

The function of VA is to ensure that private banks and VA-approved mortgage lenders who originate and fund VA loans if a Veteran defaults on their mortgage.

How VA Loans Work: What Most Borrowers Don’t Know About VA Loans

Lenders can offer such low rates on VA loans due to the government guarantee from the U.S. Department of Veterans Affairs (VA) if borrowers default and/or foreclose on their VA loans. Lenders can offer buyers 100% financing at competitive rates with no mortgage insurance premium.

The homebuyer does not put any money down on their home purchase and can cover closing costs with seller concessions up to 4% and/or lender credit.

VA loans are for owner-occupant properties only. Veteran home buyers cannot purchase a second home or an investment property with a VA loan. In this article on FAQs on VA Loans, we will explain the VA Loan Process and define a VA Loan.

FAQ on VA Loans on How Do I Shop For a VA Lender?

Many lenders constantly advertise that they offer VA Loans on television, cable, radio, the internet, and even through mailers. However, not all Lenders have the same VA Guidelines. Most lenders have lender overlays on VA Loans. Overlays are VA lending requirements imposed by individual lenders that are above and beyond those of the VA Mortgage Guidelines. Gustan Cho Associates Mortgage Group has no overlays on VA Loans.

VA Loan Refinance Scams And How To Avoid Them

Many lenders who advertise have advertisements that can be misleading, as many consumers think that the government is advertising. All VA Lenders are private lenders. Borrowers must be careful and realize that the Department of Veterans Affairs does not approve or endorse specific bank or VA lenders. All lenders that advertise offering veterans VA Loans are private lenders competing with one another for the veteran’s business.

Bait and Switch Advertisements on VA Refinance Mortgages

Be careful of ads and/or flyers that state ridiculously low rates, such as rates starting at 1.99%. This is the oldest trick in the book. You can get a 1.99% rate, but you would have to pay 10% discount points, which are 10% of the loan amount in fees.

If it is too good to be true, it normally is. Many online and/or flyer advertisements will post a U.S. flag on their ads. This is meant to deceive viewers into thinking the ad is from the VA.

The U.S. Department of Veterans Affairs does not endorse, promote, or advertise VA refinance and/or VA purchase loans.

Be Cautious When Shopping For a VA Lender Online

Many advertisements will offer free appraisals, no closing costs, the lowest mortgage rates, and 21-day closings. Many advertisers who are advertising for VA loans are not even

VA-approved lenders, but marketing companies or lead generation companies that want the veteran to contact them.

These lead generation companies will take the veteran’s information and sell that information to a mortgage lender who is interested in buying VA borrower leads for a fee.

When Shopping Online, Are Online Websites an Actual Lender or Lead Generation Company Selling Your Name To Mortgage Brokers

There are lists where marketing companies or mortgage companies can buy a list of veterans. When a veteran closes on a VA Loan or any other mortgage loan, the mortgage loan will become a public record, and veterans who close on a VA Guaranteed Mortgage Loan will have their mortgage recorded.

This is how marketing companies or mortgage companies will obtain your information and send you out a mailer in order to get Veteran homeowners to refinance their VA loan.

It is not the Department of Veteran Affairs that is releasing Veteran information. But these mailers are from private marketing companies and mortgage companies. Most of these mailers look like official documents sent out by the federal government but they are private marketing companies trying to get VA Streamline Refinancing business. Gustan Cho Associates has a big online presence. We are actual lenders licensed in multiple states with no lender overlays on VA loans. We are not a marketing company and do not sell leads.

How Do I Choose Which VA Mortgage Lender To Use?

Veterans thinking of getting a home purchase VA home loan or refinancing their current VA loan should do their due diligence. Borrowers should contact several lenders. They should talk to the loan officer.

They should see what they have to offer. They should choose a lender with who they feel most comfortable. Family members, business associates, friends, and relatives may give you names and numbers of loan officers who had a positive experience. Borrowers can do their own researching.

How Do I Find A Good Loan Officer?

Googling the loan officer’s name and checking out their reputation and the number of negative and positive reviews they have on the internet is a good start. The internet can be an extremely powerful tool in doing your due diligence. A rogue loan officer will not last long in the mortgage business. This is because consumers use the power of the internet to voice their dissatisfaction with their experiences. Several bad testimonials and reviews can ruin the career of any professional.

FAQ on VA Loans on How Do I Qualify For a VA Refinance Mortgage

Homeowners refinance to reduce their monthly housing payments or to get a cash-refinance mortgage. Homeowners refinance to reduce their monthly mortgage payments by getting a lower mortgage rate.

In order to be allowed to refinance the current VA loan, the homeowner needs a net tangible benefit where it benefits the homeowner by refinancing.

The right-hand rule of thumb is that most homeowners will benefit from refinancing their current VA loan if they are offered at least a 1.0% reduction from their new mortgage rates.

How Much Does a VA Refinance Cost?

When refinancing, the homeowner should also go over the closing costs associated with refinancing their VA loan. All closing costs can be rolled into the balance of their VA loan or by lender credit.

The veteran homeowner can also pay the closing costs outside closing. Make sure that the VA Loan Officer will explain what the break-even period will be.

Veteran borrowers need to decide on how long they plan on staying in their home prior to refinancing. Homeowners who are only planning on staying in their home a short term may not benefit from refinancing. The break-even period is important and that will be the deciding factor whether refinancing the current home loan offers a net tangible benefit to the homeowner.

What Are The Requirements For a VA Cash-Out Refinance

VA, unlike other mortgage loan programs, offers a 100% loan to value on a VA Loan Cash-Out Refinance Mortgage. Real estate values throughout the United States are increasing.

Many folks who once had their mortgage loan balances higher than the value of their properties are no longer underwater. They have seen growth in their home equity.

Many veterans who had their VA Loans underwater can now consider getting some cash out of their home equity and using that cash to pay off their bills, go on vacation, or do home improvement to their home. There is no maximum loan limit on VA loans.

What is The Maximum Loan To Value on a VA Cash-Out Refinance

VA, unlike other mortgage loan programs, offers a 100% loan to value on a VA loan cash-out refinance mortgage. VA does not have a maximum loan to value. With skyrocketing home values, homeowners can cash in on their home equity and pay outstanding bills, use the money for renovations, or use it for investments.

FAQ on VA Loans on How Do I Get My Certificate of Eligibility

FAQ on VA loans is how can a veteran become eligible for a VA loan. A Veteran who has an honorable discharge from a branch of the United States Armed Services and has served a certain amount of time in the United States Military with a Certificate of Eligibility should qualify for a VA loan. VA mortgage loan officer will be able to help the borrower in determining the entitlement borrower has on a VA loan.

How Can I Log-In To eBenefits To Request Certificate of Eligibility and Entitlement?

Borrowers can log in to eBenefits and sign up for access where they can request the Certificate of Eligibility that is entitled to them. The Department of Veteran

Affairs will be notifying the veteran even if there is an issue with the request because of using entitlements on a prior VA loan.

Those who need help in log-in to eBenefits to get COE and how much entitlement they are due, contact us at Gustan Cho Associates and we can help you.

What Is a Interest Rate Reduction Refinance Loan

Homeowners with a current VA home loan can do an interest rate reduction refinance loan, also called IRRRL. It is a VA Streamline Loan which is commonly referred to as IRRRL.

A current homeowner with a VA Loan can do a rate and term refinance, or Interest Rate Reduction Refinance Loan, IRRRL. The VA IRRRL requires very little paperwork with no income documentation, no appraisal, and no credit score check.

There are no closing costs for a better interest rate VA streamline refinance loan. Gustan Cho Associates can close VA IRRRL in less than 30 days.

FAQ on VA Loans on Are VA Loans are For Owner Occupant Homes Only

Purchasing home with a VA Loan, the home buyer needs to certify that they will be an owner occupant. It is not against VA mortgage regulations to occupy a home with a VA Loan indefinitely.

Borrowers can eventually rent out the home that they have a VA Loan and purchase another owner-occupant property. But not with a VA loan.

Veteran Homeowners who are doing an Interest Rate Reduction Refinance Loan, IRRRL, or VA Streamline Refinance Mortgage do not have to be owner-occupant of the property. All they need to do is that document that they were an owner occupant on the subject property at one time.

VA Refinance Guidelines And Streamlines

The VA Streamline Refinance Mortgage Loan, IRRRL, cannot be higher than the current outstanding VA mortgage loan balance. Closing costs and the funding fee of the VA loan can be rolled into the VA mortgage loan balance. Veterans are allowed to get up to $6,000 of energy-efficient improvement funding rolled into the IRRRL VA Streamline Loan.

Qualifying For VA Loan After Bankruptcy Or Housing Event

Veterans who had a prior short sale on a VA Loan can qualify for a VA Loan after two years from the date of a short sale.

The waiting period after a short sale to qualify for a VA loan starts from the short sale date which is reflected in the HUD Settlement Statement.

There is no waiting period to qualify for a VA Loan with a prior short sale if the veteran was timely on all of his or her mortgage payments up to the time of the short sale and the veteran did not do a short sale due to the real estate declining market conditions.

Waiting Period After Bankruptcy and Foreclosure To Qualify For a VA Loan

There is a two-year waiting period to qualify for a VA Loan after a Chapter 7 Bankruptcy discharged date. There is a two-year waiting period to qualify for a VA Loan after foreclosure and deed in lieu of foreclosure. The two-year waiting period after foreclosure and/or deed in lieu of foreclosure. The waiting period start clock starts from the recorded date of the foreclosure and/or deed in lieu of foreclosure. Or the date of the sheriff’s sale and not the date that the homeowner has surrendered the property.

VA Loan During and After Chapter 13 Bankruptcy

Veteran homebuyers who are in a current Chapter 13 Bankruptcy can qualify one year into a Chapter 13 Bankruptcy Repayment Plan. There is no waiting period to qualify for VA Loans after the Chapter 13 Bankruptcy discharged date. A veteran can get another VA mortgage loan if a prior VA mortgage loan has been paid in full.

The veteran needs to file a request that the certificate of eligibility is reinstated by visiting  http://vip.vba.va.gov and registering for access and applying for a restoration of your VA Mortgage Loan Entitlement.

Veteran homebuyers who need to qualify for a VA loan with a direct VA mortgage with no overlays on VA loans, please contact us at Gustan Cho Associates at 800-900-8569 or text us for faster response. Or email us at gcho@gustancho.com. We have no lender overlays on VA mortgage loans and are available to take your calls 7 days a week including evenings, weekends, and holidays.