There are nearly 1.5 million people in the the United States Armed Forces and another 1.4 in the Reserves. The number of US retired Veterans are even more. What do these men and women qualify for? A Veterans Affair backed loan. It is intended as a benefit for those men and women for service to their country.
The United States government has been providing services to people of the US military for over 100 years. This includes such services as medical, insurance, survivor’s benefits, disability, and pensions. In 1944 the VA loan program was first conceived. VA loans are guaranteed by the United States Department of Veterans Affairs (VA). It is a mortgage loan for buyers wishing to purchase a house, condo, or townhouse. It can even be used for building a new home. In some cases, a VA loan can be used to purchase a manufactured home. It is not a government loan. Rather should the buyer default the loan, the US Department of Veterans Affairs guarantees the lender against loss of the principal. The loan come from qualified mortgage companies that are open to the general public.
The benefits Of VA Home Loan
If you are a first time home buyer, many people may steer you to a FHA loan ( First Time Home buyer). If you are serving or have served in any of the Armed Forces branches- Army, Navy, Marine Corps, Air Force, Coast Guard or National Guard, you may qualify for a VA home loan. Reservists and in some cases, surviving spouses of American veterans may also qualify. There are also a few other situations where a person might qualify such as being a member of Public Health Service, or a cadet in United States military academy or others. Speak with a VA loan specialist today to see if you qualify. The benefits are great for a home buyer looking to purchase a home.
With a VA loan, there are no income restrictions and homes do not have to be VA approved. A large benefit is that there is no down payment required. VA loans also allow veterans 103.15% financing without PMI or private mortgage insurance or 20% of a second mortgage. This means more of the homeowner’s monthly mortgage is going towards the loan amount. Up to $6,000 is also allowed for energy efficient improvements in the home. This all allows a veteran to qualify for a loan amount larger than what traditional financing can offer including FHA, Fannie Mae, and conforming loans. If you are able to provide a down payment, the lender may increase your loan amount.
As a veteran, if you do not have to be a first time homebuyer. Or, if you already have used a VA loan, you can reuse it to purchase another home (must be primary) or to refinance. Selling your house? The loan is assumable as loan as the person who is assuming the loan also qualifies for the loan.
What Do I Need?
You must have good credit. If your credit score average is below 620 with the three credit reporting bureaus of Experian, Trans Union, and Equifax, steps can be made to improve your score. With the help a VA loan specialist, he/she can assist you in accessing your credit score. Many mistakes that have been taken care of or forgiven debts may still show up on one’s credit report. Letters written to the creditor with request for written confirmation that the debt no longer exists can then be sent to the credit bureaus. This may take 45 days or more for corrections to show up on your credit report. Your VA loan specialist can access tools to get that letter to credit bureaus in less time, sometimes as little as 3 to 5 days. This means getting your VA loan quickly and on your way to finding ones dream home.
To get a VA loan the veteran needs proof of service also known as a Certificate of Eligibility. There are three ways to obtain this certificate. Your lender can assist you, or you may obtain one by mail or online. Speak to your VA loan specialist on addresses to request your certificate from the government.
What is Some of the “Fine Print” of getting a VA Loan?
VA loans require a termite inspection and clearance. Many banks are not willing to pay for this and homeowners, especially in short sale situations are not able to, but the veteran is not allowed to pay for the termite report unless the loan is refinance. A Realtor can help negotiate this for you. VA Loan Center San Diego also require a VA appraiser to appraise the property. If any work needs to be done, again the homeowner and lender may not pay. There is a VA funding fee up to 3.15% that is paid to the VA. But, this fee can be financed or if or you may be exempt if you receive a service connected disability payment each month. Other fees associated with closing costs that a veteran can not pay with a VA loan are loan processing fees, loan underwriting fees, credit report, title search and insurance, recording fees, transfer taxes, hazard insurance and escrow fees. Ask your Realtor to negotiate these fees up front for you. Find out here!