Bad Credit Rating – Can I Get A VA Loan?

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Can I Get A VA Loan With a Bad Credit Rating?

Bad Credit Rating - Can I Get A VA Loan?While most VA home loan requirements are looser than those set by traditional banks, the VA still has some requirements when it comes to borrower credit score. If you would otherwise qualify for a VA mortgage, but have a bad credit rating, there are still ways to qualify for a loan that meets your budget and needs.

Buying a home is a very major personal and financial commitment. When buying a home, one of the biggest choices that you will have to make is picking a mortgage. For those that are members of the VA, or active military members, a great mortgage option would be to take out a VA home loan. VA home loans have a variety of approval criteria, which are generally not as tight as those set by most mortgage lenders.

Get a Co-Signer

One of the best ways to get a VA home loan if you have a bad credit rating is to get a co-signer to sign onto the mortgage. A co-signer is an individual that will take on the financial responsibility of the mortgage if you miss some payments.

Since there is another person that is taking on the financial requirements of the loan, the VA home loan lenders will be willing to take their financial situation into consideration. This will include reviewing the co-signers financial position and credit score.

Normally, it would be ideal if the co-signer were someone that will be living with you, such as a spouse or other family member.

More Money Down

One of the reasons why the VA takes credit score into consideration is because they often provide loans with as little as zero money down. While this is a great advantage for veterans that may not have a lot of cash saved, it does add risk to the lender and servicer.

If you have a bad credit rating and are not able to qualify for a traditional zero-down loan with the VA, a good option may be to put more money down instead. While it is not necessarily within their policy, if you are able to put down up to 20% of the purchase price, the lender may be willing to look past the poor credit score and approve you for the loan. However, you may still be charged a higher interest rate and fees.

Wait and Rebuild Credit

The last option that you may have for getting a VA home loan is to wait to buy the home and look for ways to rebuild your credit in the meantime. VA home lenders normally want their borrowers to have a credit score of 620.

If your credit score is in that range, it likely will not take too long to improve it to the 620 level. There are some easy and fast ways that you could improve your score, which would include paying down credit cards, opening a secured loan and show quality payment history for a few months, or have negative fraudulent information removed from your report. These tasks could lead to a quick improvement in your overall score.

Call Jimmy Vercellino – VA Loan Specialist

As an award-winning, nationwide loan originator specializing in VA loans, I can help you qualify even if you have a bad credit rating, or help you increase your credit score so you will qualify for a VA home loan. Contact me today!

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Credit Scores

Can I Buy Land with VA Loan?

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Can I Use My VA Home Loan to Buy Land?

Using Your VA Loan to Buy Land and Build a HomeThe Department of Veterans Affairs allows borrowers to use a VA home loan to buy land and construct a new home on a piece of property as an alternative to buying a pre-built home.

There are restrictions placed on the way the funds can be allocated. VA loans must be used for eligible purchases, which allows the Veteran to “purchase or construct a residence, including a condominium or cooperative unit, to be owned and occupied by the veteran as a home.”

The loans can include the land where the home will be situated and may also be guaranteed for the construction of a residence on land the borrower already owns. It’s also possible to use the funds to refinance a purchase money mortgage or contract for the purchase of the land.

Restrictions

The VA home loan to buy land cannot be made under the VA program for unimproved land with a future intent to improve.

The loan also must be closed before construction can begin to allow the money to be allocated to pay for the land the home will reside on with the remainder placed into an escrow account.

This gives the bank the authority to distribute the funds and ensures that the builder can receive payment during construction.

This isn’t only applicable to those who want to buy land that is for sale. If you meet the requirements for a VA loan, land that you already have in your possession qualifies for funding under the program.

The simple answer to whether you can use a VA home loan to buy land is yes. It can’t be in a flood zone, in an airport noise zone, and must be away from high volt electric lines or unstable land conditions where landslides, sinkholes or earthquakes are common.

Finding the Right Lender

The primary problem you might find with using a VA loan for construction is locating a lender who will allow these types of loans for construction. There are no regulations in place that require lenders to finance construction loans.

You might have to try approaching a few different lenders before you’ll find one that is willing to work with you on the project.

In some cases, it is necessary for you to first get a conventional loan from a community lender or builder for the initial financing, and when construction is complete, refinance it under the terms found in the conventional VA loan.

The best way to ensure that you don’t waste your time applying for financing that isn’t relevant to your home-buying needs is to ask the lender questions right from the start.

If you don’t find what you’re looking for the first time, do research and locate a lender close by that will offer financing to put you in your dream home once and for all.

Better yet, call me – I can steer you through the process and help you find the right VA home loan at the best interest rate.

 

VA Home Loans

Home Improvements VA Loan Information

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Can I Get a VA Loan for Home Improvements?

Home Improvements VA LoanIt’s common for veterans to want to know if there is a VA guaranteed home loan available for home improvements. The answer depends on whether you want to buy a new home with a VA loan or you already have a home.

Unfortunately, the VA does not offer as simplified a loan program as the FHA’s 203k loan program, which offers higher loan amounts to cover rehab.

Here are instances in which you may be able to use a VA mortgage for home improvement projects.

VA Energy Efficient Mortgage

An Energy Efficient Mortgage (EEM) is a specialized loan that’s made alongside a standard VA home loan for an existing home you want to buy or a refinance loan for your primary residence to make energy efficient home improvements.

The EEM program is a bit confusing, however. To use an EEM, you need to make an offer on a home and request additional funds to make energy efficient home development once you’re under contract.

There are a couple of common tiers for this program:

  • Improvements up to $3,000. This tier is the easiest to qualify and you will usually need a copy of a contractor bid or quote that itemizes the costs and manufacturer information for each item that will be installed.
  • Improvements of $3,001 to $6,000. This level of improvements also requires an energy audit that shows a year’s worth of utility averages for the home you’re buying. This audit will be reviewed to determine if your proposed improvements will make enough of a difference in energy use.

With an EEM, you can get up to $6,000 more on a loan in addition to your VA loan to make improvements to your home. The downside is not all upgrades will qualify.

Examples of acceptable improvements include furnace modifications, insulation, storm doors and windows, and thermal windows. Items that don’t qualify include air conditioning units, roof replacement, and vinyl siding.

VA Rehab Loans

A VA home loan can be used to not only buy a home but simultaneously purchase and improve a property. In general, the VA requires that a home be in move-in ready condition.

While it is possible to get a VA loan on a home that needs work, this requires finding a lender that makes these uncommon loans as well as a VA-approved contractor. The plans and specifications for all home improvements must be itemized by the contractor with an estimate for how long the improvements will take.

VA Cash-Out Refinance

If you already own your home and want to make improvements, a VA cash-out refinance may be a good choice. A cash-out refinance involves adjusting the interest rate on your loan with the option to take money out from the equity in your home. The money can then be used to finance home improvements or anything else.

A VA refinance can even be an option if you have a non-VA loan now and want to refinance into a VA loan while cashing out some of your equity.

Alternate Solution: Refinance Into a VA Loan

There is one final option that may be the best choice if you want to buy a home that needs significant work and ultimately end up with a VA mortgage.

VA rehab loans are uncommon, although the FHA 203k loan and USDA rehab loan programs may be a good option. Some qualified veterans choose to use a FHA 203k loan or other rehab loan option to purchase and fix a home before refinancing into a standard VA loan.

The downside of this option is it results in higher costs. The first mortgage will come with closing costs and likely a higher interest rate for a period of time.

 

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VA Home Loans

How Do VA Loan Rates Differ?

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Getting the Best VA Loan Rates

VA Loan RatesBuying a home is a very big financial commitment. So of course you want to find the best VA loan rates available.

When you are looking to buy a home, one of the most important factors involved is the type of mortgage that you receive. For those that are members of the US Armed Forces, or are prior members, getting a mortgage through the VA could be a great option.

VA home loans provide borrowers with several different benefits. VA home loans are fully guaranteed by the VA, which gives the providers of the loans another source of repayment if the loan goes into default.

Because of this, VA home loan providers have lower requirements for borrowers to meet. For example, the VA offers loans with no money down, has lower income level requirements, and does not require a high credit score.

While VA home loans have lower requirements, they can be more expensive for borrowers. On average, home loans from the VA have higher interest rates for several different reasons. The actual rate that you will receive on your VA home loan will depend on a few different factors.

Your Credit Score Affects VA Loan Rates

The first factor that will determine the rate that you receive on your VA home loan is your credit score. While the VA usually only requires a credit score of 620, those that are looking for a more affordable interest rate will need to have a higher credit score than the minimum.

For those that are looking for the best VA loan rates possible, a credit score of 720 or higher will be required. While it is important that you have a good credit score, your interest rate could be improved if you have a co-signor that also has a good credit score.

Down Payment

When you are looking to get a loan through the VA, another factor that will impact your credit score is the level of down payment that you have. In most cases, the VA will approve a loan with as little as zero percent down. However, these loans are still considered riskier by the VA and the lender. Because of this, you will be charged a higher interest.

If you are looking for the lowest rate and fee structure possible, it would be beneficial for you to put down at least twenty percent. This will also reduce your initial principal balance, which will reduce your overall payment even further.

Income Thresholds

Another benefit of getting a loan through the VA is that they have looser income requirements for borrowers. Most traditional lenders want to have a borrower have a debt to income ratio of 33% or less. VA home loan providers will offer loans with much higher ratios.

While they are willing to offer these riskier loans to borrowers with lower levels of income, these VA loan rates are higher to compensate for the additional risk. Those that choose to buy more affordable homes will end up being offered a lower overall interest rate.

 

VA Home Loans

Am I Eligible for a VA Loan? Find Out Now

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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.

VA Jumbo Home Loans Veterans Benefits

Can I Finance 2 Homes Using VA Loans?

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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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VA Home Buying VA Home Loans

Home in 5 Program – VA Loan

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Today I wanted to talk with you about the VA Loan Home in 5 Program. Veterans and Active Duty Military are purchasing homes at the rapid rate. That said, I am seeing more and more military families taking advantage of this booming housing market here in Maricopa County AZ which is fantastic. With a booming market however, getting our offers accepted is getting tougher and tougher, with multiple offers coming in on homes and in many cases leaving Veterans seeking seeking home frustrated and unable to win the bid.

As many Veterans may have heard in the past one of the things that makes our VA Home Loan so competitive is the fact that it does not require a down payment. However, one of the things that I have observed in the past is  at times some of buyers may view closing costs, and pre-paid items costs as a barrier to home ownership. So naturally they ask the seller to pay for them. Keep in mind that by asking the seller to pay theses costs in a competitive marketplace, like Maricopa County, can make our VA Loan offer appear less attractive to the seller promoting them to accept an offer other than ours.

So what’s the solution you ask? I believe it’s the VA Loan Home in 5 Program which allows a Veteran to get as much as a 4.5% grant towards down payment, closing costs, and pre-paid items. Why is this important? It’s important because it literally can allow a Veteran to take advantage of a VA Loan with no down payment, and no out of pocket expenses! Yes, I said it… No down payment and no out of pocket expenses!

So if you are in the market to purchase a home you owe to yourself to check out this program to see if it’s the right fit for you. Keep in mind that we as Veterans must qualify for this loan. There are credit score requirements as well as income requirements so it’s important to ensure you are qualified before we start looking at homes.

To get prequalified for the VA Loan Home in 5 Program today roger-up with me direct at 480-351-5904 or email me at jimmy@valoansforvets.com

Semper Fidelis,

Jimmy Vercellino

 

AZ Home in 5 Program

Jimmy Vercellino Top Loan Originator 2016

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First Choice Loan Services Recognizes Jimmy Vercellino

VA Loan Specialist Named Top Loan Originator

New Jersey-based residential mortgage lender First Choice Loan Services Inc. proudly announced that Jimmy Vercellino of its Scottsdale, AZ branch is the company’s Top Loan Originator of the Year.

This is the first year for First Choice Loan Services to name a Retail Loan Originator of the Year, and Jimmy is excited to receive the honor.

“Since this is a new award for our company, I had no idea that this was even a possibility, so I’m extremely humbled to be recognized as one of the first Retail Loan Originators of the Year,” said Vercellino. “I truly love what I do. Serving our country’s Veterans is my life’s calling. Knowing how these Veterans served and experiencing the sacrifices that they made, it helps me feel as though I’m continuing my service to our country. Aside from my family, being able to assist them in achieving the dream of home ownership is the most rewarding thing in my life.”

Embodying Core Values

Jimmy was chosen based on the ways he embodies the core values of First Choice Loan Services, and was selected from over 150 First Choice Loan Services Loan Originators. The company’s core values are:

  •  working with honesty and integrity
  • operating on a foundation of teamwork
  • respecting and honoring the worth of each individual
  • being proactively nimble
  • providing service beyond belief

First Choice Loan Services Scottsdale Branch Manager RJ Crosby is extremely proud of Vercellino for receiving this recognition.

“I’ve had the honor of working with Jimmy for several years now. He is not only a professional colleague but a personal friend. I am consistently amazed at the level of dedication and heart that he puts into his work. He is deeply devoted to his clients, specifically driven with a passion to serve the Veteran community. The exceptional service is able to provide them is nothing short of remarkable,” said Crosby.

First Choice Loan Services President and Chief Executive Officer Norman T. Koenigsberg believes Vercellino clearly earned this award.

“First Choice has exceptional Loan Originators throughout our company. Jimmy stands out not only for producing a high volume of VA loans but also for the way he invests and gives back to the VA community that he serves,” said Koenigsberg. “As a Veteran himself, he has a keen insight to the needs of his Veteran home buyers and home owners. He is able to relate to them in a way very few can. We are very fortunate to have Jimmy as part of the First Choice family.”

VA Loan Specialist

Jimmy specializes in VA loans for veterans and has been a featured speaker at Todd Duncan’s Sales Mastery events. His awards also include:

  • Top 1% of Mortgage Originators in American in 2015 by Mortgage Executive Magazine
  • Top VA Loan Volume by the Scotsman Guide for 2015

In his spare time, Jimmy volunteers with Hospice of the Valley, a hospice program specifically designed for Veteran patients.

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Awards

Jimmy Vercellino Ranked a 2015 Top VA Loan Originator

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First Choice News:
Jimmy Vercellino Ranked Top VA Loan Originator

VA Loan Originator Jimmy VercellinoEAST BRUNSWICK, NJ (April 1, 2016) – New Jersey-based residential mortgage lender First Choice Loan Services Inc., a wholly owned subsidiary of First Choice Bank, today announced that VA Loan Originator Jimmy Vercellino has been ranked a Scotsman Guide 2015 Top Originator. Vercellino was ranked #54 in Top VA Volume with him closing 151 loans and producing almost $38 million in volume.

Scotsman Guide, the leading resource for mortgage originators, released its seventh annual Top Originators rankings on April 1. The list, which ranks the nation’s top mortgage producers, appears in Scotsman Guide‘s April 2016 residential edition, and the rankings are available online at ScotsmanGuide.com/Top2015.

Vercellino was ranked among entries from more than 2,400 mortgage professionals across the country. To be eligible for initial consideration in Scotsman Guide’s Top Originators rankings, originators must have had at least $40 million in loan volume or 100 closed home loans for the 2015 calendar year. After receiving submissions, Scotsman Guide required written verification of top entrants’ volume data from a certified public accountant, the chief financial officer at the originator’s company or a similar source.

“It is truly an honor to appear in the Scotsman Guide ranking for Top VA Volume. So many outstanding leaders in the mortgage industry have appeared on this list, so I find it humbling to be among them,” said Vercellino. “This is also very rewarding. Because those who serve our nation make so many sacrifices, I believe it is my duty to give them a personalized mortgage experience with the highest level of attention to their long term financial goals. As a Veteran myself, I consider it my calling to continue to serve our nation’s finest through offering my deep understanding of the VA loan process.”

Executive Vice President of National Production James Iley is very excited about Vercellino’s accomplishment.

“In the years that I’ve been fortunate enough to work with Jimmy, he has always demonstrated an incredible commitment to providing Veterans and their families the knowledge, resources and guidance they need to find the home financing available to them,” said Iley. “The only thing that surpasses Jimmy’s expertise in this field is his passion to serve Veterans. Because of this, it is wonderful to see him featured in this way.”

About First Choice Loan Services Inc.

Headquartered in East Brunswick, New Jersey, First Choice Loan Services Inc. is a wholly owned subsidiary of First Choice Bank. Founded in 2009, the company is licensed to originate and close residential mortgage loans nationwide, excluding Arkansas. With 15 locations across 6 states and over 500 employees, First Choice Loan Services Inc. offers FHA and VA programs, Jumbo loans, fixed and adjustable rate loans, and refinancing and renovation programs. First Choice Loan Services Inc. is an Equal Housing Lender, NMLS #210764. Licensed by the New Jersey Department of Banking and Insurance. AZ BK# 0918586. To learn more about First Choice, visit https://fcloans.com/.

About Scotsman Guide Media Inc.

Scotsman Guide Media Inc. publishes a residential edition and a commercial edition of Scotsman Guide, in addition to Scotsman Guide News, Loan Post, Scotsman Guide Community and other platforms at ScotsmanGuide.com. Each month, the magazines reach tens of thousands of subscribers nationwide. Scotsman Guide is the leading resource for mortgage originators and connects mortgage originators with wholesale and commercial lenders.

Source: https://fcloans.com/jimmy-vercellino-ranked-as-one-of-the-nations-top-loan-originators/ 

VA Home Loan Specialist

VA Loan Process

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I am very blessed and fortunate to be able to serve Veterans and Active Duty Service-members across this great nation with all of their VA Home Loan Financing needs. One general question that appears to pop up more often than not is simply this… “Jimmy, how does the VA Loan Process work?” So since I am asked that question so often I thought it would be a good idea to take some time to explain how the VA Loan Process works.

First the Veteran or Active Duty Service-member must understand that in order for us to use our VA Loan there are certain steps that we need to take. To get VA Loan Process started and going the Veteran must request a copy of their Certificate of Eligibility. Now remember Veterans that just because we have this form does not mean that we are able to use our VA Loan Benefits yet. We still must get prequalified by a lender to ensure we meet their guidelines…Which leads me to the second step – getting prequalified for your VA Loan. Once we get prequalified Veterans now we can get in contact with a Real Estate Agent and begin looking for homes in our price range that we have been pre-approved for.

Now remember warriors that The VA Loan Process can be complex. Once you go under contract either you or your Real Estate Agent will need to send a copy to your VA Loan Lender and allow them to order the appraisal. The Appraisal on a VA Loan should take 7-10 business days to get back. Once we have that info your VA Loan will be submitted to underwriting for approval. Once your approval issued the VA Loan Process is almost done. It’s time to order loan docs and have them sent to the Escrow Company for you to sign and finalize loan docs. So that’s it…a quick down and dirty regarding the VA Loan Process.

For more questions relating to VA Loans and The VA Loan Process in particular feel free to roger up with me at the contact information below.

jimmy@valoansforvets.com

480-351-5904

VA Home Buying