VA Home Loans Facts Every Veterans Should Know

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VA Home Loans Facts Every Veterans Should Know About Eligibility Requirements

Members of active, retired, reservist, and National Guard members of the U.S.

  • Military with Certificate of Eligibility (COE) are eligible to qualify for VA Loans
  • Married spouses of veterans who passed while on active military duty service and/or as a result of a military service related disability may also qualify
  • Active members of U.S.
  • Military can normally qualify for VA Loans after six months of full time active service duty
  • There is a six year wait period for reserve members and National Guard members to become eligible
  • However, in the event they are assigned and transferred to active duty, reservists and active National Guard members are eligible to qualify after 181 days of active full time service
  • If reservists and active duty National Guard members are serving or served for at least 90 continuous days during wartime of serving on foreign soil, then they may be eligible and qualify for VA Mortgages
  • All veterans who need to qualify for VA Home Mortgages needs to obtain a COE from Department of Veterans Affairs
  • Home Buyers can start the VA Mortgage Process without the COE
  • However, the COE will be required sometime in the mortgage process

Benefits Of VA Mortgage Loans

VA Home Loans Facts Every Veterans Should Know is its many benefits. VA Loans are the best home loan program in the United States.

  • The U.S. Department of Veterans Affairs rewards our fine men and women of our U.S. Military with this precious benefit of being eligible for VA Loans for their sacrifice in serving in our Armed Services
  • Private lenders love originating and funding VA Loans due to VA partially guaranteeing home loans in the event borrowers default on their mortgages and the property goes into foreclosure
  • Due to this guarantee by the government, lenders can offer VA Loans to veterans of our military with no money down, no closing costs, no private mortgage insurance required, and mortgage rates lower than conventional loans
  • Department of Veterans Affairs does not have any credit score requirements
  • Veterans Affairs does not have debt to income ratio caps
  • Qualifying for VA Loans after a housing event such as foreclosure and/or short sale, the waiting period is 2 years versus 3 years for USDA and FHA Loans and 4 to 7 years for conventional loans
  • Outstanding collections and charged off accounts do not have to be paid to qualify

VA Home Loans Facts Every Veterans Should Know On Fees And Costs

VA Home Loans Facts Every Veterans Should Know is that home buyers do not need to cough up with any money for down payment and/or closing costs with VA Loans. How much do veterans need to purchase a home?

  • There is no down payment required on home purchase
  • However, there are closing costs on all purchase and/or refinance mortgage transactions
  • Veterans do not have to worry about closing costs
  • Home Buyers can purchase a home with zero money out of pocket
  • VA offers 100% financing
  • Closing costs can be covered with sellers concessions and/or lender credit
  • However, there is some money out of pocket home buyers may need to advance when purchasing a home
  • Sellers would want an earnest money check
  • Earnest money deposits is a promissory deposit to sellers that is refundable if the transaction does not close
  • Earnest money deposits range between $500 to $1,000 or more
  • The earnest money deposit will get applied towards down payment and/or closing costs
  • Since there is no down payment requirement and closing costs will be paid with sellers concessions and/or lender credit, the earnest money deposit will be refunded back to buyer at closing
  • Most companies will request that borrowers pay for home appraisal costs upfront prior to ordering appraisal
  • This is normally just under $500
  • Home inspections is another cost that buyers pays upfront
  • VA does not require annual mortgage insurance, a huge benefit for veterans
  • However, there is a one time VA Funding Fee that can be rolled into the balance of the loan
  • This one time fee will vary depending on the down payment, type of veteran and service
  • First time home buyer may pay 2.15% VA Funding Fee
  • However, the funding fee may be reduced to 1.25% for veterans putting more than 10% down payment on home purchase
  • Members of the National Guard and Reservist pay 0.25% more in funding fees than active duty service members
  • Veterans using their VA Entitlement for the second time with 100% financing would be paying a 3.3% VA Funding Fee
  • Disabled veterans on service connected disability compensations, the upfront VA Funding Fee is waived

Not All VA Lenders Have Same Credit Requirements

One of the most important VA Home Loans Facts Every Veterans Should Know is that not all lenders have the same credit and underwriting requirements.

  • VA does not require a minimum credit score
  • VA also does not have a debt to income ratio requirement
  • I have closed multiple countless veterans with credit scores under 600 and over 60% debt to income ratios
  • As long as veterans has strong residual income, the Automated Underwriting System can render an approve/eligible per AUS Findings
  • Gustan Cho Associates Mortgage Group has no overlays on VA Home Loans
  • However, most lenders have overlays and may not qualify veterans with credit scores under 620 and debt to income ratios higher than 43%
  • Just because veterans get turned down by one lender does not mean they will qualify with another lender
  • Over 75% of our borrowers at Gustan Cho Associates Mortgage Group are folks who are stressing during mortgage process or have gotten last minute mortgage denial due to having overlays
  • We close 100% on all of our pre-approvals because all of our pre-approvals are fully underwritten and signed off by our mortgage underwriters
  • All of our pre-approvals are loan commitments

The limit on VA loans varies by county, but the maximum guaranty amount for 2018 is $453,100. However, the loan limits goes up to $679,650 in high-cost areas in the continental United States and even higher in parts of Hawaii and Alaska. To start the VA Mortgage Process with Gustan Cho Associates Mortgage Group, please contact us at 262-716-8151 or text us for faster response. We are available 7 days a week, evenings, weekends, and holidays.

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