Please use the links below to find out more about general VA loan policies and the Department of Veterans Affairs.
VA loans have many benefits over conventional, especially for first time purchasers with little or no money down. The VA loan offers a competitive rate and does not have private mortgage insurance like other conventional loans that may have over 80% loan to value. The VA loan also offers the ability to streamline refinance (refinance for a lower rate without having to re-qualify for the loan).
What this means is that the VA guarantees the loan to the lender in case you are to default on the loan. It does not mean that you are guaranteed a loan; you still have to qualify for it based on credit and income.
Yes, most of the time lenders only look at the last 12 months history, however, bankruptcies, tax liens, and collections could have an adverse impact even if they are over 12 months old.
No, the VA does not offer any interest only programs at this time. All loans through VA pay back to the principal of your loan and you gain equity with every payment.
No, the VA does not offer stated or no-doc programs. VA only offers full documentation loans at this time.
No, the VA guarantees the lender on the loan. There is no third party mortgage insurance on a VA loan.
No, with a VA purchase you cannot get cash back at closing other than your earnest money or other money you put down before hand. VA loans do allow for energy efficient improvements that can go above the purchase price of the home.
This is allowed, but the guidelines are very strict. The second loan has to be equal or better than what you would get with one large VA loan. The rates on second loans are nearly always higher and, therefore, would not fit guidelines. Also, many lenders will not allow a second loan behind the VA loan during a purchase.
Unfortunately the VA loan is not meant for homes above $417,000. Your only real option to stick with a VA loan would be to bring the difference between your purchase price and the $417,000 to closing as a down payment.
No, at this time the VA does not guarantee HELOCS. They will allow you to cash out on your existing property up to 90%.
Equity is the amount of value a homeowner has in their property. You can calculate your equity by subtracting any liens or debts against your home from what your home is worth.
A discount point is a percentage of the loan amount you will pay to buy your interest rate lower. You can buy to a lower rate with discount points, which can sometimes save you money over the life of the loan.
A statement of service is a letter from your commanding officer stating how long you have been in the service and what your status is. It is required documentation to receive your certificate of eligibility.
Title insurance is insurance you get in case a lien is found against the property after you buy it. The title company will do a thorough check to make sure that doesn't happen. In the off chance another lien is found, you are covered.
A child care letter is a letter required on a VA loan if the borrower has children under the age of 13. A VA loan requires that child care expenses are counted as liabilities for qualification purposes.
Most of the time, the realtor will want your pre-approval letter to show that you have been approved for a loan and for how much. This is a better bargaining chip with the seller because they know you are approved for the loan and won't have to wait longer while you find new financing.
No, you can get pre-qualified before you even start looking for a property. This way you know what you can afford and what your payments will look like on the property that you end up choosing.
Many factors go into the timing of the process. To be safe you should allow at least 30-45 days for the entire process to take place. However, it is possible to close sooner.
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