Purchasing a home is one of the biggest financial decisions anyone will make in his or her lifetimes. Paperwork, real estate agents, choosing a neighborhood—and how many bedrooms? Moreover, do I choose the home with the jacuzzi? Where do I start when trying to get a loan? Don’t worry—you are in good company. We hear this all the time. Most people don’t have a clue where to start, and all the choices can feel overwhelming.If you are a veteran looking to take the leap using a VA loan, your loan details are often different from someone who is using a conventional loan.
Becoming informed of your financing options should be your first step. The truth is that the details matter when choosing your financing plan and your mortgage lender. First, let us lead with the fact that those of us here at Loanatik are profoundly grateful for the service of our veterans. We are proud to work with our Service Members, Veterans, and surviving spouses as they embark on the journey to becoming homeowners.
If you are a veteran or active duty member looking to buy a home, you may qualify for a VA loan. If so, you’ll want all the facts before proceeding.
Here are five commonly asked questions about choosing and obtaining a VA loan.
How much do I need for a downpayment?
Let’s start with the good news. Eligible VA borrowers may be able to finance up to 100% of a home’s purchase price, subject to available entitlement, lender underwriting, the appraisal, and applicable VA requirements. Unlike conventional loans, VA loans do not carry the requirement of mortgage insurance, which is another plus.
Although a down payment is not required, a VA funding fee may apply, although some borrowers are exempt. If it applies, the amount can depend on factors such as the loan type, prior use of VA benefits, and down payment; closing costs can also vary by transaction.
Do I qualify?
Just like any loan you apply for when buying a home, there are eligibility requirements to be met before qualifying. VA eligibility is only one part of qualification. Lenders also review income, debts, credit, the property, and other underwriting requirements, which can vary by lender.
According to bankrate.com, “Most active-duty military and veterans qualify for Veterans Affairs mortgages. Many reservists and National Guard members are also eligible. Spouses of military members who died while on active duty or as a result of a service-connected disability may also apply.”
Aside from the above requirements, other things are into account by your lender when determining eligibility. Some things that may affect your ability to obtain the loan are:
- Your credit score (not as stringent as conventional loans)
- A stable income
However, according to Bankrate, “borrowers must show sufficient income to repay the loan and shouldn’t have excessive debt, but the guidelines are usually more flexible than they are for conventional loans.”
The VA loan benefit was put into place so that, through dedicated service to our country, active duty military and veterans are granted a fair opportunity to purchase a home. Loanatik wants to help our heroes take the leap.
Can my sibling use my VA benefits to get a mortgage?
Unfortunately, siblings and children do not qualify for the VA benefits with a brother or parent as the active duty member or veteran. VA home-loan eligibility generally is not transferable to siblings or children. Eligible veterans, service members, and certain surviving spouses may qualify under VA rules; a lender can help confirm how those rules apply to a particular application. This benefit, unlike other VA benefits, is not transferable. At any rate, contact your lender for more details about particular circumstances. Financing options exist for a wide range of circumstances, though every loan depends on credit, income and property review.
What about refinancing?
The mortgage is not the only VA benefit that exists within this realm. The Interest Rate Reduction Refinance Loan (referred to as the IRRRL) is designed to refinance an existing VA loan to a new VA loan; it is not a cash-out refinance. Borrowers seeking to access equity should ask a lender whether a VA cash-out refinance is appropriate.
The IRRRL requires little paperwork and could significantly reduce monthly mortgage payments. It is always worth a look!
Where do I get a VA loan or refinance?
So you’ve decided that you may be ready to take advantage of historically low mortgage rates or save yourself money by refinancing. Congratulations! Now where should you start? Do you go to the VA? The VA does not make the loan. Instead, it guarantees a portion of an eligible VA loan, while the lender originates the loan and determines the available rates, fees, and underwriting terms.
Your next step is to find a qualified lender that you trust to manage your loan. Loanatik is a professional and experienced company here to help you get started. Get a mortgage rate quote from us instantly. We have a wide range of programs to match your specific needs and are experienced in VA loan benefits.
In the end, the VA benefit is called a benefit for a reason. VA loans often involve less money down and competitive terms compared with conventional financing, though rates and requirements vary by lender and borrower. We believe this is how it should be for our heroes. We appreciate your service, and Loanatik looks forward to serving eligible homebuyers and homeowners in Arizona, California, Colorado, and Nebraska, subject to program and underwriting requirements.
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