Tag: va refinance

Do bad debt or collections have to be paid off to get a VA loan approval in Kentucky


Kentucky va home lenders bad credit

 

via Do bad debt or collections have to be paid off to get a VA loan approval in Kentucky

Kentucky VA Refinance Guidelines


via Kentucky VA Refinance Guidelines

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:

1. There isn’t a cap on the amount someone could borrow.

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.

 

2. VA loans cannot be used to purchase vacation homes.

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.

 

3. Some surviving spouses are eligible.

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.

 

4. The VA doesn’t provide borrowers with the loan.

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.

5. Borrowers must receive a Certificate of Eligibility.

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).”

VA-Home-Loan-Application-Checklist

VA Mortgage Lender in Kentucky

Kentucky VA loans skyrocket in popularity for first-time home buyers


via Kentucky VA loans skyrocket in popularity for first-time home buyers

VA Underwriting Changes

 

VA has just revised Chapter 4 – Credit Underwriting and Chapter 11 – Appraisal Requirements (now named Appraisal Reports) of their underwriting guidelines. These changes will take effect for all VA loans beginning May 23rd, 2019. Major changes are as follows, but the documents have been revised throughout so it is recommended that everyone review them HERE.
  • Borrowers using rental income from a non-subject property to qualify need to document a minimum 2 year rental history and 3 months reserves PITI for each rental property (excluding property being vacated and turned into a rental). When no mortgage exists on a rental property, 3 months reserves must still be provided that cover taxes, insurance, HOA dues, and any other fees documented for the property. These reserves cannot come from equity, gift funds, or any loan proceeds.
  • Rental income from boarders can now be used as qualifying income provided
    • A 2 year history of tax returns can be provided showing boarder income generated by the property; AND
    • The use of the property for boarder rental cannot impair the residential nature of the property and cannot exceed 25% of the property’s total floor area
  • Alimony, child support, and maintenance require at least 3 years continuance to be considered effective income.
  • For payment plans after a judgment, VA will generally require 12 months of timely payments before credit is considered reestablished. A shorter repayment history may be considered if it can be determined that the borrower addressed the judgment responsibly and began a repayment plan immediately after it was filed. If borrower has missed payments within the last 12 months, they will be ineligible for financing even if the debt is paid in full.
  • For voluntary short sales or deeds-in-lieu where the borrower was current on their payments at the time the property was surrendered, no minimum derogatory credit waiting period will be required.
  • VA’s list of required Appraisal Report Contents has been updated and now includes specific photographs required on the appraisal (refer to VA Chapter 11: Topic 3: Appraisal Report Contents for full list).
  • VA Chapter 11: Topic 4: Gross Living Area has been added to provide direction in determining the Gross Living Area of the property.
  • Other sections have been updated to include guideline changes from previous VA Circulars.

Kentucky VA loans skyrocket in popularity for first-time home buyers


Kentucky VA Mortgage Lendersvia Kentucky VA loans skyrocket in popularity for first-time home buyers

Kentucky VA Loan Credit Score Requirements


via Kentucky VA Loan Credit Score Requirements

 

Louisville Kentucky VA Home Loans Frequently Asked Questions

Frequently Asked Questions

  1. What is a COE? Where can I get one?
  2. COE stands for Certificate of Eligibility. This certificate proves that you are a veteran and, therefore, eligible for a VA-guaranteed home loan. Mortgage companies that work with AllMilitary can get a COE for you during the loan process.
  3. How do interest rates fluctuate?

    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.

  4. Why should I use my VA home loan benefit?

    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.

  5. What is a funding fee? Do I have to pay for this?

    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.

  6. What does a VA lender need from me to see if I qualify for a loan?

    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.

  7. What are the benefits of 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.

  8. Can I get an interest-only loan?

    Interest-only options are unvailable with VA loans. However, many VA-approved lenders offer interest-only conventional loans.

  9. Can I purchase only land with a VA loan?

    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.

  10. May I use my VA eligibility more than once?

    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.

  11. What is the funding fee for a second VA loan?

    The funding fee is 3.3 %. But with a 5% down payment, the funding fee drops to 1.5%.

  12. How important is my credit score to the VA?

    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.

  13. Can a family member use their grandparent’s or parent’s eligibility to qualify for a VA loan?

    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.

  14. Can I use a co-borrower to help get approval?

    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.

  15. May my spouse co-sign so that I can get a larger VA 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.

  16. Can I have two VA loans at once?

    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.

  17. Does it cost anything to prequalify for a VA loan?

    No, it does not. The VA loan specialists that work with VAJoe do not charge prequalification fees.

  18. What are the differences between VA loans and a conventional loans?

    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.

  19. Are VA loan rates the same as conventional rates? Better? Worse?

    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.

  20. Does my credit score affect my VA loan rate?

    No. Your credit score has no impact on VA loan rates. It can affect rates for a conventional loan.

  21. If I filed bankruptcy, can I still get a VA loan? How long must I wait after filing?

    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.

  22. Can a friend co-sign my VA 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.

  23. As a veteran, will my VA loan entitlement ever expire?

    Your entitlement never expires. However, your Certificate of Eligibility may need to be renewed if it is older than 12 months.

  24. How much can I borrow with a VA home loan?

    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.

  25. May I use a VA loan to invest in real estate?

    A VA loan may only be used for a home that you intend to live in as your primary residence.

  26. Are VA loans provided by the U.S. government?

    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.

  27. What is an adjustable-rate VA loan?

    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.

  28. What is a fixed-rate VA loan?

    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.

  29. Do I need a down payment with a VA 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.

  30. May I use a VA loan for a vacation home?

    No, a VA loan can only be for your primary residence.

  31. If I am on active duty, can I get a VA loan?

    Yes, if the home will be your permanent residence and you are within 60 days of moving in.

  32. My realtor has implied that VA appraisers do poor work. Is this true?

    No. VA appraisers protect buyers. VA loans are government-backed, so VA appraisers need to make sure homes meet government safety and quality guidelines

 

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Your Complete Guide to the Kentucky VA Loan for 2019


via Your Complete Guide to the Kentucky VA Loan for 2019

FREQUENTLY ASKED QUESTIONS FOR KENTUCKY VA MORTGAGE LOANS


via FREQUENTLY ASKED QUESTIONS FOR KENTUCKY VA MORTGAGE LOANS

 

 

 

Kentucky VA Loans for Kentucky First-Time Home Buyers


via Kentucky VA Loans for Kentucky First-Time Home Buyers

Kentucky VA Home Loans Approval Criteria


via Kentucky VA Home Loans Approval Criteria

Basic Requirements

While VA loans don’t require a down payment and easier qualifying compared to conventional loan programs, there are still basic requirements that lenders must follow. The lender must adhere to the VA issued loan guidelines in order for the loan to be eligible for the VA loan guarantee.
Credit

VA borrowers must exhibit a responsible credit history, documented by a credit report. The credit report will show the credit history of the borrower as well as provide at least two credit scores. The credit score is a three digit number assigned to the level of credit risk associated with the borrower. The higher the credit score, the better the credit. The VA doesn’t establish a minimum credit score requirement but most VA lenders ask for a 620 credit score or better.

If the borrower doesn’t have a credit score or hasn’t established a credit history, some VA lenders allow for a “manual” credit approval. A manual approval means verifying at least three non-traditional forms of credit with a minimum two year history in addition to verification of a timely rent history. Non-traditional credit can be a cell phone bill, utility or cable bill. Note, not all VA lenders offer the manual approval option.
Income

VA lenders must certify the borrower’s ability to repay monthly debt. This is performed by calculating debt-to-income ratios, represented as a percentage of a borrower’s gross monthly income. VA loan requirements ask for a debt ratio to be no greater than 41 percent of gross household income. Although the ratio is not a strict limit, some VA lenders adhere to this number and will only allow a slightly higher ratio of say 42 to 44 if the borrower has an excellent credit history or significant cash reserves.
Occupancy

VA loans are intended for purchasing a primary residence only and cannot be used for investment property.

Why Use a VA Lender?

It’s important to use a VA lender that has been approved by the VA. Some mortgage companies who accept VA loan applications send the VA loan to yet another lender for approval. While VA loans are easier to qualify for, they have their own internal “quirks” that make the approval process a bit different compared to other loan types. Lenders who are not familiar with VA loans may stumble with a VA loan, extending the loan approval process unncesscarily or worse, having the loan declined needlessly.

Approved VA lenders have been fully vetted by the Department of Veteran’s Affairs and must meet strict VA loan experience guidelines and exhibit minimum financial net worth requirements.
LAPP

The Lender Appraisal Processing Program, or LAPP, is a streamlined method of ordering and evaluating a property appraisal. Lenders without this special authority must order the VA appraisal directly from the Department of Veteran’s Affairs, adding unnecessary time to the loan approval.
ACE

VA approved lenders have access to ACE, the Automated Certificate of Eligibility. By providing your VA loan application and authorization forms to your VA approved lender, your certificate of eligibility can be requested and obtained almost instantly by the lender.
Non-Supervised Automatic Authority

This designation allows a VA approved lender to evaluate and approve the entire VA loan package with no VA involvement. This allows a lender to streamline the loan approval process and close loans quickly.

7-Step Process for Getting a VA Loan

1. Get Prequalified Your very first step is getting prequalified. A prequalification is obtained by speaking with a VA-approved lender and reviewing your current financial picture with a loan officer. The loan officer will ask questions about your gross monthly income, current debt and your overall credit profile.

This conversation will tell you how much you may qualify for, what your monthly payments might be and how much money you’ll need to bring to the closing table. Knowing your price range will give you and your real estate agent a starting point when you begin your home search.

2. Gather Your Documentation Now it’s time to start gathering the paperwork necessary to start your VA loan process. You’ll be asked to provide your most recent pay check stubs covering at least 30 days, your two most recent W2 forms and your most recent bank and investment statements. If you’re self-employed, you will need to provide the past two years personal and business income tax returns and a year-to-date profit and loss statement

3. Your Certificate of Eligibility The certificate of eligibility is a document generated by the Department of Veteran’s Affairs validating your eligibility for a VA loan. You can obtain your certificate of eligibility by visiting your nearest regional VA center, mailing in your request or obtaining a copy online. To request your certificate, you’ll need to complete the DOD form 26-1880 and have a copy of your DD-214 as well. Yet the easiest way to obtain your certificate of eligibility is having a VA-approved lender request it for you.

4. Get Pre-approved A pre-approval is an upgrade from a prequalification. A pre-approval is issued after you apply for a VA loan and provide the necessary documentation to your VA lender. Once your credit report is pulled, your application will be reviewed and submitted for an automated approval. The only thing missing at this stage is the property address.

Your lender will then provide you with your pre-approval letter which verifies that you have completed an application and documented your loan and all you need to do next is find a property.

5. Go Shopping Now the fun part begins! Find a real estate agent that is familiar with the VA loan process. VA loans require zero money down but you should also negotiate to have the seller pay your closing costs for you. An experienced real estate agent can help guide you through the negotiations to get the right house at the right price.

Once your offer is accepted, your agent will provide you with a list of property inspectors who will physically inspect your new home from basement to the rooftop highlighting any issues that need to be addressed.

6. Processing and Underwriting The moment your sales contract is signed by you and the seller, the clock begins to tick. Most sales contracts allow for a 30 day closing period but may be adjusted depending upon your agreement with the seller.

Your lender will order a property appraisal to support the sales price as well as obtain a copy of the property’s title report. Your loan is now “in process” and you will work with both your loan officer and loan processor. The processor prepares the file for final underwriting.

The underwriter is the individual that manually reviews your file and supporting documentation to determine that your loan meets the required VA guidelines. Once that determination is made, your loan is forwarded to the closing department.

7. Closing and Funding The closing department prepares your loan documents and sends your loan papers electronically to your settlement agent who will oversee the closing. The settlement agent will prepare an initial settlement statement called the HUD-1. This is a form that accounts for all the charges, deposits and credits associated with your loan closing and itemizes any and all costs for which you’re responsible and tally the final amount needed from you to close

At your closing, you will review, initial and sign your final closing papers and provide the amount needed to close your VA loan. Your settlement agent will follow the closing instructions issued by your lender then forward the signed documents to the funding department.

The “funder” will make sure the settlement agent followed the instructions to the letter then release your funds to the settlement agent. Congratulations, you’re a home owner!

FAQ’s

VA loans are hands-down the preferred choice for those who qualify searching for a competitive loan program with no money down. VA lending guidelines are similar to those with other loan types and are approved and documented in much the same fashion as conventional loans. However, VA loans do have specific requirements that make the program unique and do have additional requirements. Here is a list of some common questions.

Since the VA guarantees my loan, does that mean I’m guaranteed a VA loan?
No, the VA guaranty is to the lender approving your VA loan. As long as the lender approves your loan using established VA guidelines, should the loan ever go into default, the lender can receive compensation of 25 percent of your loan amount. Lenders will still review your income and credit amount other requirements before issuing an approval.

What are “non-allowable” closing costs?
The VA restricts certain closing costs that may be charged to and paid for by the veteran. Your VA lender can provide you with a list of these restricted fees along with other charges that you may be responsible for.

What credit score does the VA require?
Credit scores, a 3-digit number reflecting your current credit profile, are not required by the VA. However, most VA lenders do require a minimum credit score with lenders asking for a score to be at or above 640.

How do I know if I qualify for a VA loan?
VA lenders must review your certificate of eligibility to determine whether or not you’re eligible for a VA loan. However, basic requirements ask that you have more than 180 days of active duty service, an honorably discharged veteran, served six years in the National Guard or Reserves or the spouse of a service member who died as a result of a service-related injury.

What types of loans does the VA offer?
All VA lenders provide loan choices in both fixed rate and adjustable rate loans. Most lenders offer fixed rate terms of 10, 15, 20, 25 and 30 years. Adjustable rate mortgages are typically issued as hybrids, where the initial rate is fixed for a predetermined period before changing into a loan that can adjust annually.

What is a funding fee?
The funding fee is an insurance premium that finances the VA guarantee on your loan and is expressed as a percentage of the amount borrowed. This percentage can vary based upon loan type, equity and other loan characteristics but the funding fee for a first time purchase with no money down is 2.15 percent of the loan. The funding fee may be rolled into the loan amount in lieu of paying out of pocket. Most borrowers choose to roll the fee into the loan.

Do all lenders offer VA loans?
VA loans are typically offered by most lenders but it’s important to work with a lender that is an approved VA lender. An approved VA lender is authorized to process, underwrite and fund a VA loan. It’s important that you work with a lender with extensive VA experience to help you navigate your way through the VA approval process.

Can I use a VA loan more than once?
Yes, you can use a VA loan more than once as long as your original entitlement is restored. Your entitlement is restored when you sell your house and pay off the existing VA home loan.

What is my entitlement?
The entitlement issued today is $36,000 and the VA will guarantee a loan up to four times that amount, or $144,000. For loans above that, the VA guarantee will be 25 percent of the loan amount up to $417,000. In certain “high cost” areas, the guarantee and maximum loan amounts are greater.

 

Kentucky VA Mortgage Frequently Asked Questions


via Kentucky VA Mortgage Frequently Asked Questions