VA Loan?
Guaranteed by the U.S. Department of Veteran Affairs, VA mortgage loan program aims to help veterans or their spouses (in the event of their death due to a service related cause) obtain long-term home financing. The program helps the veteran buy a home without having to pay any down payment. Borrowers, however, are required to pay a funding fee at the time of closing that can be financed into the loan.
VA Home Loan Eligibility Criteria
- The applicant must have been discharged honestly from service.
- The individual must have served either 90 days on active duty or 181 days in peacetime.
- Spouse of a veteran who died in the line of duty or due to a service related disability can also be eligible.
- Though not an essential criteria, most lenders look for a credit score of 620 or more.
"Loans are what we do, not who we are."- CEO, Steve Jacobson
Why we
love VA Loans
*Some restrictions apply
Minimum Credit Score
While VA does not have a minimum credit score required, the industry favors 620+ due to securitization on Wall Street. VA has specific guidelines required on credit that lenders must adhere to for the loan to be “insured” by VA
PMI
With a VA loan, there is never a property mortgage insurance; however, if the borrower does not have a disability rating (determined by VA), there will be an upfront funding fee (which can be rolled into the loan) ranging of 1.25-3.3% depending on the down payment and if subsequent use.
Maximum loan amount
VA does not actually have a Maximum Loan Amount. However, if the VA loan amount is over the Conventional Loan Limit (currently in 2023 the amount is $726,200), there may be additional guidelines/ criteria needed.
Down Payment
0% down– No Down Payment required with full VA eligibility. Partial down payment may be required if some of VA eligibility is tied up depending on the loan size and amount of VA eligibility used.
Debt-to-Income Ratio*
As high as automation underwriting system (AUS) allows (typically 55% with good credit) provided that the Residual Income Calculation is in line.
Guidelines
VA mortgage is the only loan program that requires the appraiser to ask for additional input by Real Estate professionals regarding property valuation.
Gift Funds
Yes-100%*- VA is more flexible with who can give a gift for the borrower’s funds to close.
Contributions*
Typically 4% – There are exceptions that may allow the seller to contribute more than 4%.
Tax Lien*
VA allows a federal IRS tax lien to continue to be paid and not paid off and still close on the mortgage.
Grant/Bond program*
Allowed! It is important to note that grant or bond programs are income, credit, and debt to income limited.
Bankruptcy
(Chapter 7)*
Two years after discharge provided that good, reestablished credit history has occurred.
Bankruptcy
(Chapter 13)*
VA allows a borrower to be in the 13th month of that Chapter 13 repayment plan and still purchase.
VA Loans
VA Funding Fee for VA Home Loans
There are fees associated with VA loans, which can make them more expensive than some other home mortgage options. The VA funding fee is a one-time fee associated with obtaining a VA loan, no matter whether it is a VA purchase or refinance. The lender sends the funding fee directly to the VA, which is used to offset the cost of administering the loans and covering up defaulted loans, thereby keeping the loan program self-funded. The funding fee cost can be to up to 3.15 percent of the loan amount. The fee, however, can be financed with the rest of the loan. VA loans, therefore, can total up to 103.15 percent of the sale price. If the sale price is higher than the reasonable value of the home, the limit of 103.15 percent applies to that reasonable value.
How We Can Help
Fairway Mortgage – Heritage Group, a trusted VA home loan provider in Texas, helps retired and active service members obtain a VA home loan, without having to face many of the hassles other lenders face because of their lack of expertise and experience. Our mortgage consultants possess a deep understanding of VA loans and the application process. You can speak with one of our experts to learn about the eligibility criteria, and to find whether you qualify. Our team members will answer all your questions and will also help you find a VA mortgage home loan that matches your future goals.
We have been constantly ranked among the top 20 organizations in the US for VA home loans closed for over a decade! Issued by qualified lenders, VA mortgage home loans provide easy home financing to eligible veterans. We value and honor the sacrifices made by the members of the U.S. Armed Forces, and deploy every possible measure to help our country’s heroes realize their dream of homeownership through VA home loans. Contact us today to let US serve YOU!
"Loans are what we do, not who we are."- CEO, Steve Jacobson
this loan
is right for you?
Take a look at our loan comparison page here to find out more about other loan types and get a better feel for which one fits your needs best!
This may vary depending upon the specific type of mortgage you are applying for, as different agencies will need to be involved in the process. Typically the process plays out in a month or less, though some will go quicker. It is not uncommon to have the mortgage application processed within 10 days. It is critical that you get the application entirely completed, so that you can avoid any delays along the way.
The main thing that can delay the approval of a loan is failing to properly and completely fill out the applications. It is also important that you be completely honest on the applications, as any discrepancies may cause delays. In addition, changing jobs, having a change in your salary, changing your marital status or taking on additional debt can delay the approval of a loan.
Closing costs include items such as taxes, title fees and hazard insurance. Sometimes what is included in closing costs varies, and it can be impacted by the negotiation process on the sale price of the home, as the homeowners may or may not cover certain closing costs. You’ll want to have some money set aside to cover your closing costs.
Prepaids are items that you as the homebuyer pay at closing. This is a payment before the actual due date. These may be necessary depending upon the details of the closing. They include taxes, hazard insurance and other various assessments.
After you close, you’ll receive a letter that includes all of the dates and information that you need. If you want further details while you are closing, you should inquire about the specific due date of the first payment.
“Loans are what we do, not who we are.”
– CEO, Steve Jacobson