In this blog, we will cover the eligibility requirements for VA home loans. We will discuss the frequently asked questions on VA home loans. VA home loans are by far the best mortgage loan program. VA home loans are only available for the United States Armed Services members with a Certificate of Eligibility from the Department of Veteran Affairs.
Those with a Certificate of Eligibility from the United States Department of Veteran Affairs are eligible for a VA loan. VA mortgages are residential loans offered by lenders where no down payment is required, and 100% financing is available.
How Do I Qualify For a VA Home Loan?
Lenders offer 100% financing for home buyers who are veterans with a Certificate of Eligibility. This is because the VA loans are insured and guaranteed by the Department of Veteran Affairs in case of default by the borrower. Due to the Department of Veteran Affairs guarantee, the risk factor is minimized.
VA-approved mortgage lenders can offer 100% financing at very low mortgage rates with no mortgage insurance premium required. VA mortgage rates are lower than conventional rates. By far is a better deal than FHA loans due to the no mortgage insurance premium requirement. In this article, we will discuss the eligibility and mortgage lending guidelines for VA home loans.
Main Advantage of VA Home Loans
The three major advantage of VA home loans is that it does not require a down payment. VA Home Loans and USDA loans are two mortgage loan programs that do not require down payments.
Every other mortgage loan program requires down payments. HUD requires a minimum of 3.5% down payment.
Conventional Loans Versus VA Home Loans
Conventional loan programs require a 3% down payment for first-time home buyers and a 5% down payment for seasoned homebuyers. Jumbo mortgage loan programs require a 20% down payment.
Investment home loans require a 15% down payment. Second home loans require a 10% down payment. Non-QM loans require a 10% to 20% down payment. Non-warrantable requires a 20% down payment. Condotel financing requires a 25% down payment.
Mortgage Insurance Guidelines on VA Home Loans
The second major advantage of VA home loans is that no mortgage insurance premium is required. All loan programs with less than a 20% down payment require private mortgage insurance.
VA loans are exempt from the mortgage insurance requirement. There is a VA loan funding fee. But the VA loan funding fee can be rolled into the VA loan.
Can You Lose Your VA Eligibility Benefits on VA Home Loans?
There are many other benefits of VA home loans. One advantage of VA home loans is that they have the lowest interest rate over any other mortgage loan program. This is due to the little risk inherited by the lender due to the government guarantee from the Department of Veteran Affairs if the borrower defaults. There are no other owner-occupant mortgage loan programs like VA home loans. However, you can also lose your VA benefits.
The United States government ensured through The Veterans Administration that our brave men and women in uniform get taken care of for their bravery, integrity, honor, and service in serving our country in peacetime and wartime. A certificate of eligibility for a VA loan is one of the greatest benefits a veteran can get for serving in the United States Armed Services.
Type of Homes Available With VA Home Loans
A home buyer can use a VA loan to purchase a single-family detached home, a condominium, a new home from a home builder, a manufactured home, or a one to 4 unit property. Both home purchase VA loans and refinance mortgage VA home loans are available.
Veterans with a Certificate of Eligibility by the United States Department of Veteran Affairs are eligible to use VA home loans to purchase an owner-occupant property in the United States and a territory of the United States, such as Puerto Rico, Guam, or the United States Virgin Islands.
Mortgage Guidelines on VA Home Loans
VA loans have lending guidelines concerning credit history, credit scores, and debt-to-income ratios. This paragraph will cover agency mortgage guidelines on VA home loans. The waiting period after the discharge of Chapter 7 bankruptcy is two years. For deed-in-lieu of foreclosure and short sales, there is a mandatory two-year waiting period after the recorded date of the deed-in-lieu of foreclosure.
There is a two-year waiting period after the date of the short sale. There is no minimum credit score requirement on VA home loans. There is no maximum debt-to-income ratio cap on VA home loans. VA home loans have lenient agency mortgage guidelines. Homebuyers with bad credit can qualify for VA home loans. Outstanding collections and charge-off accounts do not have to be paid.
VA Guidelines During and After Chapter 13 Bankruptcy
Borrowers in an active Chapter 13 Bankruptcy Repayment Plan can qualify for VA home loans one year into the payment plan. Borrowers can qualify for purchase or refinance VA home loans. It needs to be a manual underwrite. Chapter 13 Bankruptcy does not have to be discharged. Timely payment during the Chapter 13 Bankruptcy plan is required. The bankruptcy trustee needs to approve the new mortgage. Gustan Cho Associates are experts in helping borrowers during and after Chapter 13 Bankruptcy qualify and get approved for VA home loans.
There is no waiting period after the Chapter 13 Bankruptcy discharge date. There is no maximum loan limit on VA loans. Â If the Chapter 13 Bankruptcy discharge is seasoned for less than two years, it needs to be manually underwritten. Manual underwriting guidelines apply. For more information on this topic or other mortgage-related questions, please contact FHA Bad Credit Lender Gustan Cho Associates at 800-900-8569 or text us for faster response. Or email us at gcho@gustancho.com.
