Am I Eligible for a VA Loan? Find Out Now

Am I Eligible for a VA Loan?

Am I Eligible for a VA LoanBeing eligible for a VA loan is a great possibility if you have served in the armed forces, but being a vet is only the first test.

Veterans appreciate gestures of gratitude for service rendered to their country. These can take the form of verbal acknowledgement or show up as a financial donation to aid wounded warriors.

The government also provides benefits that demonstrate the high value placed on military service. Most well-known are medical services yet there is another form of assistance of equal significance. The United States Department of Veterans Affairs (VA) guarantees home mortgage loans for qualified borrowers.

How Do VA Loans Work?

Vets apply for mortgage loans like everyone else: through a private bank or finance company. Important to remember is the fact that the government is guaranteeing the loan, i.e. agreeing to pay the lender in the event the borrower defaults, not advancing the money itself.

For starters, the bank will require a VA Certificate of Eligibility (COE) before considering an applicant eligible for a VA loan. COEs are issued based on years and character of military service, and are obtained through the lender, a local VA office or the VA website. Subsequently, the lender will collect documentation to verify the information on the loan application.

The difference between the VA loan and a conventional mortgage is that underwriters will apply VA standards in approving or denying the application.

Do I Need Good Credit?

Yes, but it’s all relative. Whereas a conventional mortgage will require a strict minimum credit score of 620, applications with a VA guarantee are likely to receive more latitude since the bank knows it will be paid back one way or the other.

Overseas deployments and frequent relocations can take a toll on a veteran’s finances, so the VA requires banks to look at the whole borrower profile before rejecting an application based on credit scores.

How Much Do I Need to Earn to Be Eligible?

A borrower’s revenues will rise and fall on how much money is sought. When underwriting mortgage loans, lending institutions rely on an index called the debt-to-income ratio. This means that they will tabulate all the monthly obligations—in other words, the bills—and add the proposed monthly mortgage payment.

If this sum is less than 41 percent of the veteran’s total income, the bank is then confident that the borrower makes enough money to manage the loan payments.

Do I Need Money in the Bank?

It is not unusual for a finance company or bank to desire a financial cushion to carry the mortgagor through hard times. However, VA loans require only sufficient funds on hand for the down payment, closing costs and any additional equity not covered by the down payment.

Are There Any Restrictions on the Property?

The veteran might meet all the criteria and is eligible for a VA loan, but the loan can fall through if the house does not show clear ownership title for the seller or current owner. Unlike conventional loans, the bank can loan up to 100 percent of the property value when processing a VA application.

As a VA Loan Specialist, I can help you navigate through the VA loan process. Contact me or click the big red Apply Now button and let’s get started.


Can I Finance 2 Homes Using VA Loans?

Finance 2 Homes Using VA Loans?

Can I Finance 2 Homes with VA LoansOne of the ultimate sacrifices that someone can make is risking their life by volunteering in the US Armed Forces.

One of the benefits of being a member of the military, or being a former member, is being able to take advantage of mortgages provided by the Veteran’s Association. VA home loans come with affordable interest rates and typically have lower requirements when it comes to down payment, credit scores, and income levels.

While VA home loans are great financing options, they are generally intended to be used for primary residences only. In no situation is it permitted to use a VA mortgage to buy an investment property or vacation home.

Because of this, it can be difficult to use a VA home loan to finance 2 homes. However, there are some situations when it may be possible to have more than one VA home loan out at one time.

Need for Two Personal Residences

The VA mortgage benefit is available to active members, military veterans, and spouses. In some situations, an active member of the military may need to have a home near an assignment of duty. At the same time, the spouse and rest of the family may need to stay in another area of the country.

In these situations, the VA may approve the family for two different VA home loans. However, this will typically require a special waiver and approval from the VA and the mortgage lender that will be servicing the loan.

Selling a Home

Another situation when you may be able to qualify for a second VA home loan and finance 2 homes is if you are looking to sell one of the underlying properties, but need to purchase another home first.

In some situations, you may need to move into a new home, but will have to keep your old home for awhile.. This can be due to either economic factors, home improvements at the new home, or temporarily living in a different home from a spouse. Like other situations, this case will require special approval and waivers from both the VA and the mortgage servicer.

While there are some situations in which you will be able to qualify to finance 2 homes at once, there are other requirements that can make this more challenging.

One of the challenges of being approved for both loans at once is that you will need to meet the income requirements necessary to pay both loans. When approving a new loan, the VA will do analysis of your global cash flow and loan payment requirements. Based on this, they will want to ensure that you make enough money to pay for both mortgages. Due to income requirements, this can make it hard to qualify for both loans at once.

Another reason why many people do not qualify for both loans is due to down payment requirements. While most VA home loans do not have large down payment requirements, those that would like to buy another property with a VA home loan can be required to have a larger down payment. In some cases, they may require up to 20% down.

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