Posted on Aug 5, 2020
Looking to slide into home? Get the facts about the VA home loan program
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Looking to slide into home? Get the facts about the VA home loan program
Many of us want to own a home, refinance our too-high mortgage payment or use some of our home’s equity for a big purchase. But getting the best deal means first wading through a confusing thicket of financial information.
Luckily, if you’re a veteran, service member or family member of one, you have quality financing options through the U.S. Department of Veterans Affairs (VA) home loan program.
Eligible Native American veterans may seek a VA loan to buy, build or improve a home on federal trust land through the Native American Direct Loan (NADL) program.
For all others, VA guarantees a portion of your loan, which helps banks and other lenders provide money at a lower cost toward the purchase or refinancing of your home. In the VA-backed home loan category, we offer three main types of benefits:
Purchase loans to buy a home, condominium or manufactured home.
Cash-out refinance loans to refinance a non-VA loan into a VA-guaranteed loan.
Interest rate reduction refinance loans to obtain a lower-interest loan or to move from a variable interest rate loan into a fixed-rate loan.
Key considerations
Should you pursue a VA-guaranteed home loan or another type of loan? Here are some considerations to help you make your decision:
Know the benefits. Unlike with conventional and Federal Housing Administration (FHA) loans, most VA loans do not require a down payment or mortgage insurance. In addition to these money-saving benefits, VA may offer competitive interest rates and limited closing fees. If you’re an eligible veteran, service member or family member, you can get a VA home loan at any age. You can reuse this benefit, even if you’ve had a VA loan foreclosed on. You can even have more than one active VA loan.
Understand the process. The process for obtaining a VA-guaranteed home loan is relatively simple if you meet VA’s eligibility, credit and income requirements. Start by gathering the information you need for the Certificate of Eligibility at https://rly.pt/VAeligibility and apply online at eBenefits.VA.gov. Then, contact the lender of your choice. (If you’re eligible for the Native American Direct Loan, VA is the lender.)
Meet the criteria. Even though VA guarantees loans, you still must meet lenders’ criteria in terms of credit history, income and other factors that affect your ability to pay the loan. And some lenders have criteria that exceed our VA guidelines. Work to build up your credit score well in advance of your home purchase so you are able to obtain the best interest rate possible on your loan. In general, however, VA-backed loans offer the most competitive rates.
Avoid mistakes. Educate yourself about the home-buying process. Even if you’re eligible for the VA home loan benefit, compare offers from multiple lenders and shop around to compare interest rates and fees and get the best deal. Be sure to consider the true cost of homeownership and make sure you can handle the monthly mortgage payments on the home.
Dispel the myths. Despite what you may have heard, homes purchased with VA-backed loans do not take longer to close or appraise at lower amounts. Another recent development is that the Blue Water Navy Act removed effective loan limits for VA-guaranteed loans closing after Jan. 1, 2020. This may benefit you if you’re seeking a no-down payment jumbo loan in a high-cost market.
Learn more
Call a VA Regional Loan Center at [login to see] to ask questions about COEs, homebuying or underwriting.
Visit https://rly.pt/VAhomeloan
Many of us want to own a home, refinance our too-high mortgage payment or use some of our home’s equity for a big purchase. But getting the best deal means first wading through a confusing thicket of financial information.
Luckily, if you’re a veteran, service member or family member of one, you have quality financing options through the U.S. Department of Veterans Affairs (VA) home loan program.
Eligible Native American veterans may seek a VA loan to buy, build or improve a home on federal trust land through the Native American Direct Loan (NADL) program.
For all others, VA guarantees a portion of your loan, which helps banks and other lenders provide money at a lower cost toward the purchase or refinancing of your home. In the VA-backed home loan category, we offer three main types of benefits:
Purchase loans to buy a home, condominium or manufactured home.
Cash-out refinance loans to refinance a non-VA loan into a VA-guaranteed loan.
Interest rate reduction refinance loans to obtain a lower-interest loan or to move from a variable interest rate loan into a fixed-rate loan.
Key considerations
Should you pursue a VA-guaranteed home loan or another type of loan? Here are some considerations to help you make your decision:
Know the benefits. Unlike with conventional and Federal Housing Administration (FHA) loans, most VA loans do not require a down payment or mortgage insurance. In addition to these money-saving benefits, VA may offer competitive interest rates and limited closing fees. If you’re an eligible veteran, service member or family member, you can get a VA home loan at any age. You can reuse this benefit, even if you’ve had a VA loan foreclosed on. You can even have more than one active VA loan.
Understand the process. The process for obtaining a VA-guaranteed home loan is relatively simple if you meet VA’s eligibility, credit and income requirements. Start by gathering the information you need for the Certificate of Eligibility at https://rly.pt/VAeligibility and apply online at eBenefits.VA.gov. Then, contact the lender of your choice. (If you’re eligible for the Native American Direct Loan, VA is the lender.)
Meet the criteria. Even though VA guarantees loans, you still must meet lenders’ criteria in terms of credit history, income and other factors that affect your ability to pay the loan. And some lenders have criteria that exceed our VA guidelines. Work to build up your credit score well in advance of your home purchase so you are able to obtain the best interest rate possible on your loan. In general, however, VA-backed loans offer the most competitive rates.
Avoid mistakes. Educate yourself about the home-buying process. Even if you’re eligible for the VA home loan benefit, compare offers from multiple lenders and shop around to compare interest rates and fees and get the best deal. Be sure to consider the true cost of homeownership and make sure you can handle the monthly mortgage payments on the home.
Dispel the myths. Despite what you may have heard, homes purchased with VA-backed loans do not take longer to close or appraise at lower amounts. Another recent development is that the Blue Water Navy Act removed effective loan limits for VA-guaranteed loans closing after Jan. 1, 2020. This may benefit you if you’re seeking a no-down payment jumbo loan in a high-cost market.
Learn more
Call a VA Regional Loan Center at [login to see] to ask questions about COEs, homebuying or underwriting.
Visit https://rly.pt/VAhomeloan
VA Loan
Home Loan
Veterans Affairs (VA)
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Posted 6 mo ago
Responses: 7
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I used my VA home loan benefits for the first time four years ago and then again last year. Don't know why I waited so long. Zero down got us into a home four years ago that we couldn't have managed otherwise. Great program. Work with a lender or mortgage person experienced with the VA loan guarantee program.
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There is no special privilege for VETs, except for the no down payment benefit. If you don't have good or acceptable credit, don't even bother until you are in an acceptable range.
An acceptable range for VA is actually 660. And then your credit report is also a determining factor. Your eligibility does not mean zip. You still have to go through the process like any other person. No one will help you if you are middle class or below. No one is willing to take a risk for or with you. A lot of red tape out there. There are no home developments being built for the middle class or for low income people any more. I speak out of experience and for myself.
An acceptable range for VA is actually 660. And then your credit report is also a determining factor. Your eligibility does not mean zip. You still have to go through the process like any other person. No one will help you if you are middle class or below. No one is willing to take a risk for or with you. A lot of red tape out there. There are no home developments being built for the middle class or for low income people any more. I speak out of experience and for myself.
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John Burke
Unfortunately it sounds like you've dealt with some bad lenders.
I can go down to a 600 score on VA & FHA loans but, thanks to COVID19, the rates are a little higher for the lower scores.
I can go down to a 600 score on VA & FHA loans but, thanks to COVID19, the rates are a little higher for the lower scores.
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SrA Andres Alejo
The VA home loan is a big help. You would normally pay about 20% of what your house cost. I am glad I did not have to come up with 37K. Talk to more lenders. My lender helped me fix my credit so we could get my score higher.
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SSG Bo Feitshans
I have to agree with John on this one. As a mortgage banker and 10-year Army veteran, I assure my comment's come strictly from VA Pam 26-7. The VA has no credit restrictions, however individual lending intuitions have the right to set their own floor on VA credit scores they are willing to approve. Typically, credit scores in the range of 600-630, is as low as lenders will approve, but I have seen as low as 580.
Veterans using the VA home loan program have outstanding benefits (special privilege's). Starting with mortgage insurance for example, If a borrower has a 650 credit score and want's to buy a home with a loan amount of $300,000 and only 3-5% down payment on a conventional loan, then their mortgage insurance premium could be as high as $400/month. I just ran a quick MI quote and that's what was generated.
Veterans on the other hand don't even have to think about that because there is no mortgage insurance expectation. On top of that, veterans can easily purchase a home with $0 down. Home down payments can be someone's life savings (considering a 30-35 year old or someone in a lower income bracket). Instead of being forced to deposit that money on a home purchase, the veteran can control those funds however they choose. That truly goes a long way for most buyers and their families.
That same non veteran 650 credit score borrower I just ran rates, and their interest rate could easily be between 4.000% to 4.500%. But, that same scenario as a Veteran and this morning's rate is showing 2.875%. The lower rate here saves them nearly $250/ month.
Combining the VA sheltered rates for lower credit borrowers and the no mortgage insurance benefit and overall the non-veteran is looking at $650+ in extra monthly cost. But the Veteran stands to save that $650. Truth is there are good lenders and bad lenders and some that just don't want to take on more time consuming loans. I would recommend doing some research on VA Pam 26-7 and other VA loan focused articles. Doing a little homework is always a good approach. Another way to start learning is to make a few calls to mortgage bankers and ask questions. I always appreciate a veteran caller coming to me to learn how to achieve their homeownership goals!
Best of luck,
Bo Feitshans
VA Pam 26-7
https://benefits.va.gov/warms/pam26_7.asp
Veterans using the VA home loan program have outstanding benefits (special privilege's). Starting with mortgage insurance for example, If a borrower has a 650 credit score and want's to buy a home with a loan amount of $300,000 and only 3-5% down payment on a conventional loan, then their mortgage insurance premium could be as high as $400/month. I just ran a quick MI quote and that's what was generated.
Veterans on the other hand don't even have to think about that because there is no mortgage insurance expectation. On top of that, veterans can easily purchase a home with $0 down. Home down payments can be someone's life savings (considering a 30-35 year old or someone in a lower income bracket). Instead of being forced to deposit that money on a home purchase, the veteran can control those funds however they choose. That truly goes a long way for most buyers and their families.
That same non veteran 650 credit score borrower I just ran rates, and their interest rate could easily be between 4.000% to 4.500%. But, that same scenario as a Veteran and this morning's rate is showing 2.875%. The lower rate here saves them nearly $250/ month.
Combining the VA sheltered rates for lower credit borrowers and the no mortgage insurance benefit and overall the non-veteran is looking at $650+ in extra monthly cost. But the Veteran stands to save that $650. Truth is there are good lenders and bad lenders and some that just don't want to take on more time consuming loans. I would recommend doing some research on VA Pam 26-7 and other VA loan focused articles. Doing a little homework is always a good approach. Another way to start learning is to make a few calls to mortgage bankers and ask questions. I always appreciate a veteran caller coming to me to learn how to achieve their homeownership goals!
Best of luck,
Bo Feitshans
VA Pam 26-7
https://benefits.va.gov/warms/pam26_7.asp
Apply for and manage the VA benefits and services you’ve earned as a Veteran, Servicemember, or family member—like health care, disability, education, and more.
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SPC Washington George
SSG Bo Feitshans - Please give me a call [login to see] you sound very confident my Experian score is 655 thats my lowest score but its going up slowing every month..Im looking to get a multifamily home..I have a COE with no funding fee and Im service connected looking to buy in a state where I will pay no property taxes except on a multifamily divided into living area if its 2 family I will pay 50 per cent of the property taxes..my income is all nontaxable lower middle 60,000 Im married 3 kids so a family of 5.Thank you
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If both a husband and a wife have there own separate VA home loan certificate can they use both towards the same house. One to purchase and the second to refinance?
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SPC Navshad Lalani
yes they can but it will not make any difference on the terms of the loan, you only need one person eligible to buy a home with va. also it might be better to use only one persons so you can use the other to buy another home if you relocate. you can also buy two homes with one eligibility certificate depending on how much more va guarantee you still have on the certificate
Platinum Financial Services Naush Lalani, Broker NMLS 395028 BRE 01034450 CELL: [login to see] FAX: [login to see] [login to see] Zero Down Financing Available, Bad credit, no credit, bankruptcy, Forclousre, short sale, tax lien, collections ok.
Platinum Financial Services Naush Lalani, Broker NMLS 395028 BRE 01034450 CELL: [login to see] FAX: [login to see] [login to see] Zero Down Financing Available, Bad credit, no credit, bankruptcy, Forclousre, short sale, tax lien, collections ok.
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