Veteran Families Use VA Loans to Buy Homes in Hot Real Estate Market

Are you a veteran of the military? Whether active duty or someone who has served in the past? And looking to use your VA loans to purchase a home but not too sure where to start? The Local Records Office created a list of requirements to use your VA loan to purchase your first house. The credit score required and potential income in order to qualify and become a homeowner.

Homebuyers must have a stable, reliable income to cover monthly expenses, including their mortgage payment. Additionally, the VA requires borrowers to maintain a certain level of income over each month after major expenses are paid. This excess remaining is meant to pay for family needs, ie. food, and transportation, and is also referred to as residual income.

Residual income in the VA keeps one of the lowest foreclosure rates in all lending options. The VA also increases the chances of borrowers earning a sufficient amount of income and meeting all financial obligations, as well as ensures that borrowers have a cushion in an emergency situation. The private lenders who finance the home purchases also have criteria the potential borrower must follow, including debt, income, and credit requirements. Veterans United will pull up the three leading credit agencies, and examine your debt-to-income ratio.

Here Are the Different Ways You Can Use VA Loans:

  • Purchase a home, a condominium unit in a VA-approved project
  • Purchase a home
  • Simultaneously purchase and improve a home
  • Upgrade a home by installing energy-related installments or energy-efficient improvements
  • Purchase a manufactured home and/or lot
  • Refinance an existing VA-guaranteed or direct loan for a lower interest rate
  • The benefits of a VA loan

Credit Score

The VA loan will still require closing costs and the negotiated earnest money deposit to “hold” the house. More lenient requirements to obtain a loan. The required debt-to-income ratio at often times is more flexible than conventional mortgages. A credit score for a VA loan can be lower than a conventional loan -620 for a VA loan compared to 650-700 for most conventional loans.

VA Loan Certificate of Eligibility

You do not need a VA Loan Certificate of Eligibility to get started in the loan process with Veterans United, though this certificate is very handy and an important part of your loan application. COE verifies your eligibility to ensure the length and character of your service are in tack to apply for the VA home loan benefit. Contact a VA-approved lender and start your VA Loan application. You can also apply online through VA’s eBenefits portal or apply by mail with the VA Form 26-1880.

Lenders Will Help You Apply for a Certificate of Eligibility

Finalize the loan application by providing the necessary paperwork to your lender including W-2s, tax returns, and your most recent bank statements. Check your eligibility to meet for a VA Home Loan here, by speaking to a VA Loan Specialist at 1-800-884-5560 or get started online. This process takes minutes to complete when you have proof of your military service and ensures that your home financing moves forward without any delays.

Less Closing Costs

  • Usually, the closing costs veterans are allowed to pay, (legally) include the following:
  • Credit Report
  • Appraisal
  • Origination fee
  • Recording fee
  • Survey
  • Title Insurance

Private Mortgage Insurance

Conventional buyers have to pay Private Mortgage Insurance (PMI) when they put less than 20% down. Private Mortgage Insurance (PMI) protects lenders when in case a borrower goes into default. There is still a “funding fee”- an upfront cost applied to every purchase loan or refinance. And the proceeds help the VA cover losses on the few loans that go into default expresses the Local Records Office. In any case, it helps you build more equity in your house and helps you save thousands during the life of your mortgage. This saves big on monthly payments since PMI runs to about $200 per month, explains the Local Records Office.

Help With Appraisal

The appraisers notify lenders in the event the appraised value is likely to be low, giving buyers and realtors 48 hours to give additional information to help justify the home’s value that the appraiser was not aware of. When a veteran is considering purchasing a home but having trouble reaching the purchase price during the appraisal, buyers, and lenders can ask the VA appraisal to consider adjusting the valuation before reaching a final decision.

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