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What is a VA Loan

September 5, 2010

In this world, we are filled with heroes. They do not need to have super natural powers to fight the way X-men or Marvel Comic’s heroes defend what is good. Your heroes are just ordinary men, who use guns and ammunitions, to stand for their country. And their secret weapon is valor and patriotism. 

Military men, the GI Joes, the soldiers; these people are whom we refer to us heroes. People who have been there fighting for their country since the time and memorial. They loose their limbs and even their lives for the benefit of their countrymen. It is simply amazing what they have done to keep America they way it is: a superpower. 

These people deserve all the benefits that they could receive; even the family that they left behind. One of the best benefits they can get is the VA Loan. 

Understanding VA Loans 

So what makes this different from other types of loans? VA loans are just like any kind of mortgage. However, it allows veterans to fulfill their dreams of becoming a homeowner without requiring them to pay down payments or private mortgage interests. Their homes will be 100% financed. 

But what happens to the lender? How can they protect themselves for the risks involved in granting the loan? This kind of loan is federally guaranteed. This means the US government will guarantee the specific amount in the event the veteran cannot pay. Guaranty would be equivalent to 25% of the home loan with a maximum of $104,250. However, this ruling have been changed brought by the Veterans Benefits Act of 2004. 

The maximum loan granted for VA is $417,000. This can be used in home buying, as well as adding of home improvements. 

Qualified Applicants

VA loan is not for everybody. It was specifically made for the war veterans as mandated by G.I. Bill or the Servicemen’s Readjustment Act. The following veterans are qualified for such loan: 

Those who have served the army for at least 90 days but were not discharged dishonorably. Those who have served during peacetimes for at least 181 continuous days. Those who served after September 7,1980 and has completed 2 years of service. Those who became officers that began service after October16,1981 and served for at least 2 years. National Reserves and Guards who were activated in August 2, 1990 and were discharged honorably. Selected Reserves and National Guards who were discharged after 6 years of service.

Before applying for the loan, the veteran must obtain their Certificate of Eligibility. This is accomplished by filling out VA Form 26-1880. It must be submitted to appropriate VA centers for processing.

How to get the loan 

Getting the loan is a very easy process. Here is a summary of it: 

Find a property to buy. Make an offer to purchase. Find lenders who are active in giving out VA loans. Then, follow their process for application of loan. Presented all documents required including the Certificate of Eligibility, including info about the employers for the past two years, DD214 forms and other pertinent information. The property will be appraised to ascertain the reasonable property value. After everything is set and completed, the loan will be granted and veteran would now be ready to purchase their homes. 

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Get a VA Loan to Refinance your Home

September 4, 2010

Way back from 1944, the Veterans Administration or VA of the U.S. has been financing as well as refinancing homes for veterans from the armed services under the G.I. Bill of rights or the Servicemen Readjustment Act. Under this act, veterans can get approved easily for a home loan or a refinancing home loan that is guaranteed by the government in the U.S. even though the actual loan might be provided by a bank, a mortgage company or other financial institution. VA refinance is available to anyone who has served in the military in the U.S. Refinancing you home enables you to take benefit of a lower interest rate and bring down the payments you have to make each month to a more controllable amount. If you get a VA loan to refinance at just half a percent lower rate of interest, you can be sure that you will save a few thousands in dollars over the life of your VA loan.

Besides, under President Barack Obama there has been a new option introduced for veterans who are on the lookout to refinance their home mortgages. It is known as the Making Home Affordable program. Under this new program, there will be plenty of homeowners who will be able to refinance at a rate which is more affordable helping then stay in their homes and at the same time have a few dollars left in their pockets. To get a VA loan like this it is required that your first mortgage does not exceed 105% of the market value your home currently has. In other words, if your home is evaluated at $100,000, it is not possible for you to owe more than $105,000 on your existing mortgage. VA refinance makes it possible for many mortgage holders and VA homeowners to refinance their loans to a new amount that they can handle currently and into the future.

A lot of homeowners who are trying to refinance their home find that the market value might have dropped to such an extent that they cannot find a lender who will give them the new refinancing that they require. But the Making Home Affordable program has made it easier for VA homeowners to get a VA loan. VA refinance is indeed the best way to go.

Before homeowners can get a VA loan, the lender will give them a good estimate that will permit them to see the new rate of interest as well as the new payment amount that will have to be made every month besides other terms which they can compare to what they are currently paying. This helps the homeowner to see how much he can save and decide if refinancing is the right option for him at that point in time. Most often than not, refinancing is the right path to take but then there are exceptions to every rule. But with interest rates at a low that they are currently at, VA refinance should be just perfect.

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Latest VA Mortgage Auctions

September 4, 2010

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The Mortgage Manual: Q & A's on Fha, Va and Convent

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Qualifying for VA Loans

September 3, 2010

VA home loans (Veteran Administration loans) are there so veterans and active-duty service members could be given the opportunities of materializing home buying endeavors. This could also be utilized so these people could retain ownership of their homes. The VA loans are a way showing the country’s appreciation of their services. Eligible applicants are as follows:

Active-duty veterans and current service members. Their service could be either during wartime, at least 90 days or during peacetime, at least 181 consecutive days. Discharge reasons should not involve dishonorable state of affairs. Gulf War service members. Their service could be either two years of uninterrupted active duty or 90 days since called to service. The allowed reasons of discharge would be under 10 USC 1171 or 10 USC 1173 with 90 days of active duty. If they are discharged before completion of the said periods, it should be due to disability during active service. Guard and Reserve personnel. For six years, the service member should have a combination of these activities: active duty, weekend drills and at least two weeks of training. Discharge reasons are alike those of the Gulf War service members’. Unmarried spouses of veterans are also eligible. Their veteran spouse should have the cause of death or disability occurring during active service. The spouses who are enlisted missing in action (MIA) or prisoners of war (POW) could also apply for the VA loan.

Eligibility determination is only the initial process. To fully qualify for the VA loan, here are more details the applicant needs to consider:

The VA website issues the Certificate of Eligibility. This is a priority home loan entitlement for the applicant. In some cases of applicants who could not access the website, the document could be obtained by the bank or mortgage company. Proper authorization should still be at hand.

Legitimate grounds for loan qualification are as follows:

purchasing or constructing a new home enhancing or refurbishing the existing property loan refinancing. Applicants with existing VA loans could still use the loan to refinance other loans.

The VA loan guarantee could be up to 50 percent of the home, equal to $45,000. Depending on the amount of the loan, other guarantee rates are available. So the loan could be used, the applicant should employ another lending company. This is because the VA only guarantees the loan. Nonetheless, the VA loan process is much alike the lending agency’s:

The property would be appraised and a Certificate of Reasonable Value (CRV) would be issued. This is to ensure of the property’s value and the loan suited for it. Financial documents should be submitted like the income statement and credit report. These prove credibility of the applicant. The form for VA eligibility should also be furnished. When all these and other requirements are complete, the loan would be underwritten.

There are also basic funding fees:

For most applicants, the loan’s 2.0% would be paid to the VA. Reserve and Guard members pay 2.75%. For down payments up to 10%, fee is reduced. If the applicant does not make a down payment, the fee is 3%.

Other expenses are also charged, like appraisal, origination fees usually the loan’s 1% and others.

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Latest VA Mortgage Auctions

September 3, 2010

Hey, check out these auctions:

1930 Stock Certificate: 'Grace Mortgage - Richmond, VA'

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VA Loan Requirements

September 2, 2010

If you are considering a VA home loan, then you may want to understand the VA loan requirements to see if this type of mortgage will fit your needs. Well I will tell you, this is one of the most awesome loan products out there. Why do I say that? Because it allows for a no down payment loan. Consider the savings!!!

Before you even contemplate a VA mortgage, one of the requirements you have to meet is being or have been in the military. If you have not served in the military, no need to read further. Take a look at other loan programs to see which will suite your needs better. But if you have been in the military read on for the VA loan requirements.

VA Loan Requirements:

Obtain a Certificate of Eligibility
Loan must be for a purpose approved by the VA
Veteran must occupy or intend to occupy the home within a reasonable time after closing
Veteran must have good credit
Veteran must have income enough to make the mortgage payments and other necessary costs to maintain the home

Here is a break down of each of these requirements:

Certificate of Eligibility

This is a documents that provides proof of your military service and eligibility for a VA home loan. If you do not have a certificate, you can acquire one by making application on VA Form 26-1880, Request for Determination of Eligibility and Available Loan Guaranty Entitlement, from your local VA office. You would also include copies of your most recent discharge or separation papers covering active military duty.

VA Home Loan Purposes

The VA Mortgage is designed to help veterans toward home ownership. Below is a list of some of the approved purchases:

To buy a home.
To build your own home.
To purchase and improve a home at the same time.
To refinance an existing home loan.
To buy a manufactured home.

Occupancy Requirements

The veteran must reside in the property as their primary residence. What if the veteran is on active duty? The spouse residing there satisfies this occupancy requirement.

Credit Requirements

You will need one year of good credit history and at least a credit score of 620. So if your credit is not too good, work on your credit first so you will not have any problems qualifying for a VA home loan.

Income Requirements

Just like any other loan product, you will need sufficient income to cover daily living expenses plus your possible housing expenses for buying that sought after home. They will look at any debts you have such as car payments and credit card debts. So its a good idea to have your debts paid down when you apply. Another method they use is the debt to income ratio. When using this method the VA home loans use a ratio of the total debts including the new house payment. They usually like to see your total debts being no more than 41% of your total income this includes the estimated house payment. So take a look at what you owe. Do you have room to make a house payment?

See the requirements are not complicated. There are a couple big incentives with this type of loan product. Down payment is not a requirement so you can get 100% financing. They also do not require private mortgage insurance (PMI). Those two things allows you, the veteran, to have big savings in buying your home. Just make sure your credit and income satisfy the VA loan requirements.

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Latest VA Loan Auctions

September 2, 2010

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Your Guide to VA Loans: How to Cut Through The Red Ta..

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Credit Requirements for VA Loan

September 1, 2010

Most banks require a minimum 620 credit score and 12 months mortgage history with no lates. Types of imperfections on a credit report that may affect the VA loan approval process: Collections Late payments Judgments Payment History Factor

Re-payment history is an important factor in getting approved for a VA loan. Your rental and mortgage payment history signify your ability to pay your housing payment and will better qualify you for a VA loan.

If you lack credit history, provide explanations for any of the following: If you are a veteran who has been recently discharged and have not been able to establish credit Use cash instead of credit on a regular basis for bill paying and purchases Veteran has not used credit since reconciliation of bankruptcy and judgments Bankruptcy

Bankruptcy does not immediately disqualify a veteran who is applying for a VA loan. If you have had a bankruptcy discharged over 2 years previously to applying for a VA loan it may not be considered. If the bankruptcy discharge was within 1-2 years of applying for a VA loan there are a couple things that are taken into consideration that may still help qualify a veteran:

If you have obtained credit following the bankruptcy and made satisfactory timely payments If reasons for Bankruptcy were above and beyond the control of the veteran-Loss of job, medical bills, divorce, loss of a business etc. Foreclosure

Foreclosure is still another issue that will be a deciding factor in qualifying a veteran for a VA loan. The same rules apply as did with bankruptcy, but if the foreclosure is on a VA loan that may change the amount of entitlement available to be used.

Plan ahead and improve credit

When applying for a VA loan, work in advance to reconcile issues on your credit report by paying collection accounts in full or setting up payment plans with judgments against you.

Here are several things you can do: Get a free copy of your credit report in order to review Letters from creditors stating balances have been paid in full Pay credit card bills down to at least half of what open credit in on card Secured credit cards can help re-build credit

Close excess credit cards that are open only keeping necessary and low interest rate credit cards open—to much open credit can hurt you qualify for a VA loan

http://nobsvaloans.com/2009/06/va-loan-credit-requirements/

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Latest VA Mortgage Auctions

September 1, 2010

Hey, check out these auctions:

The Mortgage Manual: Q & A's on Fha, Va and Convent

US $4.00 End Date: Saturday Sep-11-2010 13:52:46 PDT Buy It Now for only: US $4.00 Buy it now | Add to watch list

1930 Stock Certificate: 'Grace Mortgage - Richmond, VA'

US $9.99 End Date: Saturday Sep-25-2010 16:58:33 PDT Buy It Now for only: US $9.99 Buy it now | Add to watch list

Posted by admin under VA Loan | Comments (0)