Tag: va refinance
The President is expected to sign H.R. 299, the ‘Blue Water Navy Vietnam Veterans Act.’ This legislation includes language which will eliminate the cap on the VA home loan guarantee.
The U.S. Department of Veterans Affairs (VA) designed a mortgage loan specifically for veterans, active-duty service members and reservists to make it easier for them to buy a home. While some borrowers may be familiar with this loan, they may not know certain details.
VA home loans don’t have a limit, are only available through lenders, must be used for primary residences and eligible to surviving spouses, and require a Certificate of Eligibility.
Let’s take a closer look:
Unlike many other mortgage loans, VA loans don’t have a set cap on how much money a borrower could receive, according to the VA. This essentially means there isn’t a limit. However, the VA itself does, with it only assuming liability on a certain amount.
“The loan limits are the amount a qualified Veteran with full entitlement may be able to borrow without making a down payment.”
Specifically, “there are limits on the amount of liability VA can assume, which usually affects the amount of money an institution will lend you,” states the department. “The loan limits are the amount a qualified Veteran with full entitlement may be able to borrow without making a down payment. These loan limits vary by county, since the value of a house depends in part on its location.”
These limits also tend to change from year to year, and can be viewed on the VA’s official website.
One of the stipulations of a VA home loan is that the property being purchased must be used as the borrower’s primary residence. This means any vacation homes, as well as properties buyers are interested in purchasing for investment purposes, do not qualify. However, buyers aren’t limited to only single-family homes. Multi-family homes, some condominiums, and manufactured homes, are also eligible—they just need to be approved by the VA beforehand.
As aforementioned, VA home loans were developed to help veterans, active-duty service members and reservists afford a home. Still, there are some exceptions in which surviving spouses may be eligible, as well. Several conditions in which this could take place, as described by the VA, include:
A surviving spouse of a veteran who was killed in action or by a combat-related disability may qualify, for example, as long as he or she is not remarried. A spouse of an active-duty service member “missing in action or a prisoner of war” could obtain this type of loan, too.
Additionally, any surviving spouses who remarry on or after age 57, and on or after December 16, 2003, or who are married to a “certain totally disabled” veteran “whose disability may not have been the cause of death,” are also considered an eligible candidate.
The VA created the loan and guarantees it, but the agency doesn’t actually provide qualified borrowers with a VA loan. Applicants would need to be approved by a trusted mortgage lender and obtain the funds that way, instead.
Although borrowers have to apply for a VA home loan via a lender, they must receive a Certificate of Eligibility (COE) by the VA to be approved, which they can do online, via mail, or through their lender. A COE simply proves that they are suitable candidates and meet the loan’s qualifications. Since different types of buyers could be eligible, the VA breaks down what each one would need to obtain a COE:
For instance, any veterans applying need a DD Form 214, and are “required to have a copy showing the character of service (item 24) and the narrative reason for separation (item 28).”
Interest rates can change daily, sometimes even a couple times a day. They are based on the 30-year mortgage bond and many other market factors. Credit, employment status, loan program and many other factors can also affect interest rates.
The VA loan program helps active duty and retired military personnel purchase homes. The VA will guarantee 100% financing on a home at a competitive rate, without you having to pay mortgage insurance. The VA also limits the types of fees that can be charged, protecting you against predatory lending.
The VA funding fee is a fee added to loans. The Department of Veterans Affairs uses these fees to help fund its VA loan program. The first time you use a VA loan, the funding fee will be 2.15% of the loan amount. For each subsequent use, the funding fee will be 3.3%. You will be required to pay it, unless you have a service-related disability of 10% or greater, in which case the funding fee is waived.
A VA lender will want to know your income and debts, and your social security number so that your credit history can be checked. After you supply this information to a lender, it will contact you in a few hours to let you know if you are eligible for a VA loan.
A VA loan offers 100% financing with no mortgage insurance fees. The loan is assumable, and you are eligible for streamlined refinancing if rates go down. A VA loan also offers great rates and is less strict on credit than most conventional loans.
Interest-only options are unvailable with VA loans. However, many VA-approved lenders offer interest-only conventional loans.
No, VA loans are for home purchases and new home construction. The VA will not approve a loan that is only for land. However, you may use a VA loan to purchase a lot for a manufactured home.
Yes, but in most cases you can only hold one VA loan at a time. After the first home loan is paid in full, your eligibility will be restored for another loan.
The funding fee is 3.3 %. But with a 5% down payment, the funding fee drops to 1.5%.
The VA does not emphasize credit scores as much as conventional lenders. However, it does looks for a clear credit history in the borrower’s previous 12 months.
No, only a veteran or the surviving spouse of a veteran killed during active duty is eligible for VA loan benefits. Active duty servicemembers also are eligible if the home they are purchasing will be a permanent residence and they are within 60 days of moving in.
VA guidelines only allow a spouse as a co-borrower. However, many VA-approved lenders offer conventional financing, which may be more suitable if a co-borrower other than a spouse is needed to secure a loan.
Your spouse may co-sign in order to help you qualify for a VA loan. However, your spouse’s liabilities, in addition to your spouse’s income, will be considered when determining eligibility and loan amount.
No. You can have only one VA loan at a time, and it must be used for a home that is your primary residence. After you pay off that loan, you are eligible for another VA loan.
No, it does not. The VA loan specialists that work with VAJoe do not charge prequalification fees.
The main differences are that VA loans are guaranteed by the Veterans Administration, they require no money down, and they usually are easier to qualify for than conventional loans.
Some days VA rates are better, some days they are worse. It depends on many market factors. However, VA loan rates are always close to conventional rates.
No. Your credit score has no impact on VA loan rates. It can affect rates for a conventional loan.
Yes, you are still eligible for a VA loan. You must be at least one year out of Chapter 13 bankruptcy or two years out of Chapter 7. You also must have no late payments in the year leading up to applying for the loan.
Only spouses can co-sign on VA loans. However, other loans, such as conventional home loans and FHA loans, may allow a friend to co-sign.
Your entitlement never expires. However, your Certificate of Eligibility may need to be renewed if it is older than 12 months.
You may be able to borrow enough to cover 100% of your home purchase and could qualify for up to a $417,000 loan. In Alaska and Hawaii, the loan guarantee limit is $625,000. On a refinance you can borrow up to 90% of the appraised value of your home.
A VA loan may only be used for a home that you intend to live in as your primary residence.
The Department of Veterans Affairs does not actually loan the money for VA loans. It insures loans that VA-approved lenders provide, which allows borrowers to get loan amounts for 100% of the appraised value of a home.
An adjustable-rate loan starts off at a slightly lower interest rate than a fixed-rate loan. Most often it stays at this rate for three, five or seven years. After that, the interest rate changes every year to the current interest rate.
A fixed-rate loan has an interest rate that stays the same. The interest rate at the time the loan is finalized is the interest rate for the life of the loan.
A VA loan covers 100% of the value of a home, so a down payment is not required. However, you have to pay any closing costs. But the seller can pay these closing costs for you up to an amount that equals 6% of the home’s value. This usually is more than enough to cover closing costs, so you can move into a home with no money out of pocket.
No, a VA loan can only be for your primary residence.
Yes, if the home will be your permanent residence and you are within 60 days of moving in.
No. VA appraisers protect buyers. VA loans are government-backed, so VA appraisers need to make sure homes meet government safety and quality guidelines