Getting A VA Loan In California With Direct Lender With No Overlays

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Getting A VA Loan In California With Direct Lender With No Overlays

This BLOG On Getting A VA Loan In California With Direct Lender With No Overlays Was UPDATED On October 25th, 2018

Advice On Getting A VA Loan In California For Veteran Borrowers

The state of California is one of our nation’s largest and most populous states. California also has one of the largest population of both active and retired military personnel.

  • The state of California also has one of the country’s highest home prices
  • Average home value in the United States is $221,700
  • Average home prices in California is $456,900
  • Since home values are almost double in California than other states, many counties in the state of California is classified as high cost areas
  • VA Loan Limits in most areas of the United States is capped at $453,100
  • However, VA Loan Limits in high cost areas of California is capped at $679,650
  • California Veteran Home Buyers can purchase higher priced homes in California and can go higher than the high cost VA Loan Limit of $636,150
  • However, any VA Loan Amount over the maximum VA Loan Limit of $679,650 the California Veteran Borrower needs to put 25% down payment

Qualifying For California VA Loan

Getting A VA Loan is limited for home buyers or mortgage loan borrowers who are veterans of the United States Armed Forces. Veteran Borrowers only with a Certificate Of Eligibility can qualify for VA Home Loan in California.  Veterans need to meet the mortgage lending guidelines of the United States Department of Veteran Affairs.

  • VA Loans is hands down the best loan program out there today
  • There are no down payment requirement on VA Loans
  • Closing costs can be covered through a sellers concession or a lender credit where there can be zero out of pocket dollars from a VA home buyer
  • Unfortunately, not everyone can qualify for a VA Loan
  • Being eligible for a VA Loan is one of the greatest benefit of being a veteran of the U.S. Armed Forces
  • VA Loans have the lowest mortgage rates out of all mortgage loan programs
  • There is no monthly mortgage insurance premium on VA Loans
  • The VA upfront funding fee can be rolled into the balance of the VA mortgage loan

Who Qualified For VA Loans

Veterans home buyers who had a honorable discharge from one of the branches of The United States Military with a VA Certificate Of Eligibility can qualify for a VA Home Loan:

  • The first step is to research on a VA mortgage lender where veteran borrowers feel comfortable working with
  • Analyze own credit profile
  • If veteran borrower has less than perfect credit or higher debt to income ratios, try to look for a direct lender with no overlays on VA Home Loans
  • Gustan Cho Associates at Loan Cabin Inc. is a VA Direct Lender With NO Overlays on VA Home Loans

Who Lends On VA Residential Home Loans?

The Department of Veteran Affairs (VA) is not a lender. The function of VA is to insure and guarantee VA Loans that is originated and funded by private banks and lenders. VA’s role is to guarantee banks and lenders in the event the veteran borrower defaults on their VA Home Loan. It is up to the individual home buyer to research and choose the VA Lender of their choice.

VA mortgage lenders aggressively advertise on the following media networks:

  • Television
  • Cable TV
  • Radio
  • Newspapers
  • Internet
  • Mailers

Types Of VA Lenders And Choosing The Right VA Mortgage Lender

Keep in mind that VA mortgage lenders who advertise are private banks and lenders who have no affiliation or endorsement by the Department of Veteran Affairs

  • Many of them try to mislead the viewer by having them think that they are part of a government
  • The CFPB, Consumer Protection Financial Bureau, is cracking down on Lenders that imply that they are endorsed by the VA and federal government
  • It is illegal for advertisers to advertise that dealing with them will get the borrower special treatment
  • There are many lenders who have gotten fined for such advertisement
  • Some lenders have even gone out of business because of misleading and deceptive advertisement
  • Make sure to do due diligence when selecting a VA mortgage lender
  • Check them out on the internet and make sure that they do not have any disciplinary actions against them
  • Check out their reviews online
  • Today’s power of the internet can get consumers a lot of information by Googling the loan officer and the company they represent

Keep in mind that there are always two sides of the story. Further due diligence is required if the mortgage loan officer has pages after pages of poor reviews and testimonials year after year.

Getting A VA Loan And Qualifying With Solid Pre-Approval

The pre-approval stage is the most important phase of the mortgage process.

  • The reason of last minute mortgage denials or stress during the mortgage process is because the mortgage loan originator did not pre-approve the borrower correctly
  • Unfortunately, many loan officers issue pre-approval within minutes of looking at the borrower’s credit score
  • Some do not even look at tax returns or even look at the borrower’s credit report
  • Just seeing if the borrower’s credit scores qualify is not good enough
  • A loan officer needs to review the borrower’s credit report and payment history
  • Most mortgage underwriters will deny a VA loan application if there are any late payments in the past 12 months
  • Borrowers with a prior foreclosure or deed in lieu of foreclosure, the loan officer should carefully check to see when the recorded date of the foreclosure and/or deed in lieu of foreclosure was
  • Not just go off what is reporting on the borrower’s credit report
  • Credit bureaus do make mistakes and public records should be carefully reviewed thoroughly

Reasons For VA Home Loan Denial & Stress During Mortgage Process

Stay away from loan officer that will issue you a pre-approval letter minutes after taking mortgage loan application. Loan Officers issuing pre-approval letters without asking borrowers for two years tax returns, two years W-2s, and most recent paycheck stubs should be carefully vetted.

  • Tax returns are extremely important because unreimbursed expenses will negate your gross income
  • Many times if clients have way too much write offs on tax returns, this will disqualify them for a VA Loan
  • The Gustan Cho Team at Loan Cabin Inc. offers W2 Only Program on VA Loans for W2 Wage Earners where tax returns is not required
  • A pre-approval letter should be issued once the loan officer has extensively interviewed the VA loan borrower and has checked the borrower’s full credit and income profile:
  • The following should be reviewed thoroughly:
    • Credit scores
    • Credit report
    • Payment history
    • Income docs
    • Public records if any
    • Active Credit Disputes

Borrowers need to get their Certificate Of Eligibility.

  • Lender should be able to get the certificate of eligibility 
  • It is not too difficult to get the certificate of eligibility
  • The veteran can do it themselves by downloading it and completing the request and mailing it with the copy of the veteran’s DD214 form

Getting A VA Loan And Selecting A Real Estate Agent

Once armed with a solid pre-approval letter, home buyer is now ready to start shopping for a property and enter into a real estate purchase contract.

  • The next step is choosing a real estate agent who they feel comfortable working with
  • Just like how home buyers choose a lender, they should carefully select a real estate agent who they feel comfortable with
  • Make sure that to check out their referrals by reviewing their online reviews and testimonials
  • Make sure that they return phone calls promptly, preferably 7 days a week
  • If a real estate agent and/or loan officer does not return phone calls or emails at the early stage of the home buying and/or mortgage process, that can mean trouble down the road

Remember that the home buying process is a process and it normally takes anywhere between 30 days to 60 days to close on a home loan.

  • Home Buyers are not in any obligation to continue with a mortgage loan officer or realtor throughout the whole home buyer process
  • Buyers can fire loan officer or real estate agent if they are not happy with them and are not contractually obligated to them

Getting A VA Loan And Entering Into A Purchase Contract

Armed with a solid VA pre-approval letter, buyers are on the way of getting a VA Loan and with a real estate agent, can start shopping for a home.

  • Once a home is chosen, buyers can put in real estate purchase offer with the help of their real estate agent
  • The real estate agent will assist on placing a real estate offer on the home purchase
  • VA allows up to a 4% in sellers concession from the home seller to be able for buyers to use it towards closing costs
  • It is extremely important that the purchase contract states all of the contingencies such a the following:
    • Financing contingency
    • Home inspection contingency
    • Appraisal contingency
  • The contingencies are stipulations where it will enable home buyers to cancel the real estate purchase contract and get earnest money back
  • Once real estate purchase offer has been accepted by the home seller, the ball is in motion
  • The mortgage loan officer is ready to start the loan approval process
  • A home appraisal will need to be ordered by the lender
  • However, the home inspection, which is not required by the Department of Veteran Affairs, is normally done prior to the home appraisal
  • If by any chance the home inspection report is not satisfactory to standards, buyers can opt to cancel the whole real estate transaction
  • If the home inspection meets standards, then the home appraisal is ordered

VA Home Loan Mortgage Process

When veteran home buyers enters into a real estate purchase contract, it needs to be submitted to the loan officer. Mortgage loan file is processed and is assigned to a mortgage underwriter.

  • The loan officer will ask for updated docs such as updated paycheck stubs and bank statements
  • The file is assigned to a loan processor who is familiar with processing VA Loans
  • Processor submits file to underwriter
  • Once the mortgage underwriter reviews mortgage file and meet the VA mortgage lending guidelines, the mortgage underwriter will issue a conditional mortgage approval
  • The file is sent back to the loan processor and the loan officer
  • This is so they can gather all the conditions listed on the conditional loan approval
  • Once the conditions are met, it is sent back to the mortgage underwriter for final review
  • If the mortgage underwriter is satisfied with all of the conditions, then the underwriter will issue a clear to close
  • A clear to close means that the Loan is ready to fund by the lender and docs is ready to go out to the title company
  • The closing department of lender will contact the title company and set a closing date
  • The closing is where the funds gets wired and all paperwork is signed by both the home seller and home buyer
  • Buyer gets the keys to the property and the home seller gets the proceeds of the sale

Getting A VA Loan is not difficult at all. The above explains the steps in Getting A VA Loan for a veteran with a Certificate Of Eligibility.

Qualifying For VA Loan With Direct Lender With No Overlays

Veteran Borrowers needing to get qualified for a VA Loan with a direct mortgage lender with no overlays on VA Loans can contact The Gustan Cho Team at Loan Cabin at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com. We are available 7 days a week, evenings, weekends, and holidays.

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