VA Chapter 13 Guidelines on VA Home Mortgages
This article will discuss and cover the VA Chapter 13 Guidelines. VA and FHA loans are the only two traditional home loan programs that allow borrowers to qualify for VA loans during the Chapter 13 bankruptcy repayment plan. It is no secret that our Veterans have put themselves through a lot. VA Chapter 13 Guidelines enable borrowers to qualify for VA loans while in a Chapter 13 Bankruptcy to purchase or refinance a home without the bankruptcy being discharged.
Many of our veterans struggle financially. This is an unfortunate stat and something that we all hope changes in the future. Sometimes our veterans are forced into filing for bankruptcy.
FHA and VA Chapter 13 Guidelines are very similar. This blog will detail obtaining a home while in a Chapter 13 bankruptcy. Understanding the difference between Chapter 7 and Chapter 13 bankruptcy is important. This blog will detail how to apply for VA loans during Chapter 13 bankruptcy. This article will discuss and cover the VA Chapter 13 guidelines on VA home mortgages.
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VA Chapter 13 Guidelines During and After Discharge
Gustan Cho Associates are experts in VA mortgage financing. We specialize in manually underwriting VA loans during Chapter 13 Bankruptcy. The team at Gustan Cho Associates has a very aggressive approach to VA loans during Chapter 13 Bankruptcy without LENDER OVERLAYS. This allows us to lend to more Veterans. We do not have a minimum credit score requirement.
While most lenders will tell you that there is a minimum credit score to get a VA loan, that is a very common overlay, NOT a guideline. There is no minimum credit score requirement or maximum debt-to-income ratio on VA loans on automated underwriting system and manual underwriting.
Most banks require a 620 or even a 640 credit score, but please understand that requirement is specific to their bank and not a HUD guideline. The U.S. Department of Housing and Urban Development (HUD) oversees VA mortgage guidelines. A VA mortgage is one of the most lenient mortgage products regarding qualifying. The following paragraphs will review some basics of passing a VA manual underwrite.
Down Payment and Closing Costs on VA Loans
In most home purchase transactions, there is the down payment and closing costs. Lenders offer 100% financing on VA loans. Most of our borrowers at Gustan Cho Associates do not have to come up with any closing costs. Closing costs can be covered with seller concessions or lender credit. Coming with the down payment is not a problem for a veteran since 100% financing is available.
Entitlements on VA Loans
There is no limit on how often they can reuse their VA entitlements. There is no expiration period either on VA loans. Just because veterans decide to rent for many years, their entitlements never expire. They can always use it during their lifetime. Veterans can refinance their current VA loan, pay it off with a different loan program, and purchase their next home with a VA mortgage. The same applies if they pay off their mortgage loan balance. If the VA loan is paid off, their entitlement is restored, and they can qualify for another VA loan with full entitlement.
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VA Chapter 13 Guidelines on Trustee Approval
The trustee will still want to look at your financial picture and verify that you can afford your home. Typically, they want your mortgage payment to be similar to what you currently pay for rent. If your mortgage payment rises considerably, the trustee will want to reevaluate your Chapter 13 repayment plan. It is important to contact your Chapter 13 attorney before submitting any documentation to the trustee. You do not want to shoot yourself in the foot and have a higher Chapter 13 obligation.
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VA Loan Limits
NAVY VIETNAM VETERANS ACT OF 2019, loan limits were removed for VA borrowers. That is right, a Veteran can now use their 100% financing to buy a home above the conforming loan limit. Our investors are currently allowing loan amounts up to $3 million! As home values Across the nation continue to climb, our veterans will be able to purchase a home without a down payment. Previously, a veteran would need a 25% down payment or the difference between the maximum loan amount and the purchase price. This is a huge change for our nation’s veterans. See our VA LOAN LIMIT BLOG for more information on the loan limit cap removal.
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Do All Lenders Have The Same VA Chapter 13 Guidelines
I hope you understand from this blog that we are incredibly aggressive with VA manual underwriting. We understand it more than most lending institutions. As you can see from our reviews, we can help numerous veterans with Chapter 13 bankruptcy purchase a home. Owning a home is important for every American, and 100% VA mortgage financing is a huge benefit offered to those who serve and protect this great nation. Without our incredibly strong veterans, this country would not enjoy the freedoms that it does.
Getting Approved For a VA Loan With New Lender After Being Denied
Remember, the current lender has turned down 80% of our clients or is not getting the customer service they deserve. VA financing deals with many lender overlays in the mortgage industry, so come to the experts who do not have any overlays. For any general mortgage questions, please call Mike Gracz at 630-659-7644.
Gustan Cho Associates has zero lender overlays on VA Chapter 13 Guidelines during and after Chapter 13 Bankruptcy on VA home loans.
If you are a veteran stationed overseas and only have access to email, feel free to email mgracz@gustancho.com. We encourage you to check out our other blogs on VA mortgage financing and subscribe to our YouTube channel to stay updated on the changing VA mortgage guidelines. We look forward to helping you and your family buy the home of your dreams.
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