For years, the city of Hinesville, Georgia has been known as the home of Ft. Stewart, where modern-day patriots come to aid in the protection of our great nation and our wonderful freedoms. We know at Re/max All-American that securing a VA home loan can be a confusing process: from knowing if you qualify or not to what requirements you must meet to get your loan. It is truly our passion to help the men and women who serve our country in any way that we can, so we have provided some information about VA home loans below.
A VA loan is a veteran benefit for active duty military and/or discharged veterans and their families. For those who qualify, a VA loan can be a blessing as it allows a veteran to do things that no other product will allow.
With a VA loan, a veteran can purchase a home with no money down and 100% financing. This loan also allows a veteran to loan over 80% of the home value with no mortgage insurance. A VA loan will also allow a veteran to complete a cash-out refinance at up to 95% of the value of the home. What is even better is that the interest rates are typically the same or better than a conforming loan.
• You have had 90 days or more of active duty service during wartime
• You have had 181 days or more of active duty service during peacetime
• You were discharged for circumstances that were not dishonorable
• You are currently active duty personnel, and you meet the above service requirements
• You are the surviving spouse of a Veteran who died during service or because of service-related injuries and you have not remarried
• Unmarried surviving spouses of military members who passed away during service, or by the result of a disability caused by service are eligible
It should be noted that Reservists have to have had served 6 years with an honorable discharge.
Fortunately, VA loans do not have extremely strict credit requirements. Those who apply will need a 620 mid FICO credit score to qualify with most lenders, and an applicant’s past 12 months of payment history has to be good. While it is generally OK if you have had a few late payments, you will have a problem qualifying if all of your current credit lines are late.
If you have recently filed for bankruptcy, applicants must wait 2 years from the discharge date on a Chapter 7, and 1 year from the discharge date on a Chapter 13. During the Chapter 13 repay period, you must make sure that you pay all of your payments.
Applicants must show that they can make a payment and still have money left over for normal expenses like utilities, gas and food supplies. VA will look at your past 2 years of employment or income in order to figure out whether or not you make enough money to qualify for a loan.
You should know that VA does require a funding fee to complete a new loan. Sometimes the lender can pay this for you based on the rate they offer but usually the lender does not pay for the funding fee, and VA allows you to finance it into the loan.
For first time use and for 100% financing purchase or construction loans, the required VA funding fee is currently 2.15%. If you are able to put up to 10% down, the VA funding fee drops to 1.5%. If you can put 10% or more down, the VA funding fee drops to 1.25%. You should know that if you use the VA home loan benefit for a second time, the funding fee rises to 3.3%.
For Reserves and National Guard members, the funding fee tends to be higher. For first time use and with 100% financing, the fee is 2.4%. If you are able to put down up to 10% on the home, the fee drops to 1.75%., and if you are able to put 10% or more down, the fee drops to 1.5%.
Some borrowers are not required to pay a VA Funding fee, and those include the spouse of a veteran who passed away in service or a veteran who is being paid disability.
We know that all of this can be a lot to take in at once, so if you have any questions at all about VA loans, please do not hesitate to call Re/max All-American today to speak with one of our fine representatives to find out all of the information that you need to know.