A VA loan is a mortgage for an eligible veteran that is guaranteed by the federal government. To qualify generally requires 181 days of peacetime service and a discharge that is other than dishonorable. For service during wartime 90 days of active service is needed. You can also may be eligible with a minimum of six years service in the National Guard or selected reserves. Contact your local VA office if you are not sure if you qualify. A veteran’s entitlement is $36,000 (some exceptions may apply). A lender will usually loan up to four times the entitlement amount without a down payment. The property will need to appraise for the selling price to qualify for the zero down feature.
The veteran will need to have an appropriate income in relation to the size of the size of the loan. The guideline is that your proposed home payments and other credit obligations should not be greater than 42% of your income. The property must be for the acquired for the veteran’s occupancy. Your credit should be mostly good, especially in the last two years. A bankruptcy must be at least two years old with good credit after the bankruptcy. A foreclosure should be three or more years old. Check with a local lender for additional information.
Finance rates are low for VA loans because the lender has reduced risk. The interest rate is negotiable and you may be able to save by shopping several lenders. You may choose the lender that you prefer, as long as they participate in VA loans. There is no down payment in many cases. There are limits on fees that the lender or broker may charge. The lender will normally allow the seller to pay some or all of the closing fees. There is no PMI insurance required for a VA loan. You will be required to keep a homeowners insurance policy as long as the loan is open.
This is an excellent program for veterans. However there are some cases when a non VA loan could have advantages. Some lenders have developed loans specifically to compete with VA loans. They may offer an enhancement to try to get business that would otherwise go to a VA lender. I suggest asking your loan provider to give you options both ways.
The veteran will need to have an appropriate income in relation to the size of the size of the loan. The guideline is that your proposed home payments and other credit obligations should not be greater than 42% of your income. The property must be for the acquired for the veteran’s occupancy. Your credit should be mostly good, especially in the last two years. A bankruptcy must be at least two years old with good credit after the bankruptcy. A foreclosure should be three or more years old. Check with a local lender for additional information.
Finance rates are low for VA loans because the lender has reduced risk. The interest rate is negotiable and you may be able to save by shopping several lenders. You may choose the lender that you prefer, as long as they participate in VA loans. There is no down payment in many cases. There are limits on fees that the lender or broker may charge. The lender will normally allow the seller to pay some or all of the closing fees. There is no PMI insurance required for a VA loan. You will be required to keep a homeowners insurance policy as long as the loan is open.
This is an excellent program for veterans. However there are some cases when a non VA loan could have advantages. Some lenders have developed loans specifically to compete with VA loans. They may offer an enhancement to try to get business that would otherwise go to a VA lender. I suggest asking your loan provider to give you options both ways.
