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VA Home Loans Eligibility And Mortgage Guidelines

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VA Home Loans Eligibility And Mortgage Guidelines

This BLOG On VA Home Loans Eligibility And Mortgage Guidelines Was PUBLISHED On July 7th, 2019

VA Home Loans Eligibility And Mortgage Guidelines

Frequently Asked Questions On VA Home Loans:

VA Home Loans is by far the best mortgage loan program.

  • VA Home Loans are only available for members of the United States Armed Services with a Certificate of Eligibility from the Department of Veteran Affairs
  • Those with a Certificate of Eligibility from the United States Department of Veteran Affairs are eligible for a VA Loan
  • VA Mortgages are residential loans offered by lenders where no down payment is required and 100% financing is available
  • Lenders offer 100% financing for home buyers who are veterans with Certificate of Eligibility
  • This is because the VA loans are insured and guaranteed by the Department of Veteran Affairs in case of default by the borrower
  • Due to the guarantee by the Department of Veteran Affairs, the risk factor is minimized
  • VA approved mortgage lenders can offer 100% financing at very low mortgage rates with no mortgage insurance premium required
  • VA mortgage rates are lower than conventional rates
  • By far is a better deal than FHA loans due to no mortgage insurance premium requirement

In this article, we will discuss VA Home Loans Eligibility And Mortgage Guidelines.

Main Advantage Of VA Home Loans

Main Advantage Of VA Home Loans

Three major advantages of VA Home Loans is that it does not require a down payment.

  • Two mortgage loan programs that do not require down payments are VA Home Loans and USDA loans
  • Every other mortgage loan program requires down payments
  • HUD requires a minimum of 3.5% down payment
  • Conventional loan programs require 3% down payment for first time home buyers and 5% down payment for seasoned home buyers
  • Jumbo mortgage loan programs require 20% down payment
  • Investment home loans require 15% down payment
  • Second home loans require 10% down payment
  • Non-QM Loans require 10% to 20% down payment
  • Non-warrantable require 20% down payment
  • Condotel financing require 25% down payment

Mortgage Insurance Guidelines On VA Loans

Mortgage Insurance Guidelines On VA Loans

The second major advantage for VA Home Loans is that there is no mortgage insurance premium required.

  • All loan programs with less than 20% down payment require private mortgage insurance 
  • VA loans are exempt from the mortgage insurance requirement
  • There is a VA loan funding fee
  • But the VA loan funding fee can be rolled into the VA loan
  • The third advantage of VA Home Loans is that they have the lowest interest rate over any other mortgage loan program
  • This is due to the little risk inherited by the lender due to the government guarantee from the Department of Veteran Affairs in the event the borrower defaults

Type Of Homes Available With VA Home Loans

Type Of Homes Available With VA Home Loans

A home buyer can use a VA loan to purchase a single family detached home, a condominium, a new home from a home builder, a manufactured home, a one to 4 unit property.

  • Both home purchase VA loans and refinance mortgage VA loans are available
  • Veterans with a Certificate of Eligibility by the United States Department of Veteran Affairs are eligible to use a VA home loan to purchase an owner occupant property in the United States as well as a territory of the United States such as Puerto Rico, Guam, or the United States Virgin Islands

VA Home Loan Guidelines

VA Home Loan Guidelines

VA Home Loans have lending guidelines with regards to credit, credit history, credit scores, and debt to income ratios.  Here are the VA Home Loan Guidelines:

  • The waiting period after the discharge of Chapter 7 bankruptcy is two years
  • For deed in lieu of foreclosure and short sales, there is a mandatory two year waiting period after the recorded date of the deed in lieu of foreclosure
  • There is a two year waiting period after the date of the short sale
  • There is no minimum credit score requirement
  • There is no maximum debt to income ratio cap on VA Loans
  • Outstanding collections and charge off accounts do not have to be paid
  • Borrowers who are in an active Chapter 13 Bankruptcy Repayment Plan can qualify for VA Mortgages one year into the payment plan without needing the discharge of the bankruptcy
  • There is no waiting period after Chapter 13 Bankruptcy discharge date
  • There is no maximum loan limit on VA Home Loans

For more information on this topic or other mortgage related questions, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com.

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