Who Qualifies For A Va Mortgage
According to the VA official site, the following people qualify for VA home loan consideration:
- Military members with minimum qualifying service
- U.S. citizens who served in the armed forces of a government allied with the United States in World War II
- Qualifying surviving spouses of military members who died as a result of military service
- Members of certain organizations, such as Public Health Service officers, cadets at the United States Military, Air Force, or Coast Guard Academy, midshipmen at the United States Naval Academy
- Officers of National Oceanic & Atmospheric Administration, merchant seaman with World War II service
Can I Use A Va Loan After A Foreclosure Or Short Sale
Yes, you can use a VA loan 1-2 years after a foreclosure or short sale.
In the case of a prior foreclosure or short sale of a home with a VA loan, the Department of Veteran Affairs usually takes a financial loss. VA guarantees the VA lender and when the property is sold for less than the loan balance, it affects the Veterans VA entitlement.
If there is a prior VA foreclosure or short sale, VA loan guidelines do require sufficient re-established credit. A buyer must wait 1-2 years after the foreclosure is final to use their VA loan benefit.
Short sales may be more lenient. In cases where there were no late payments prior to the short sale, it may be possible to use a VA loan immediately. Otherwise, it depends on the scenario and re-established credit history.
Can A Va Loan Have A Co
The VA does allow for co-borrowers, including ones who dont meet the VA loan programs military service requirements. Adding a co-borrower can help both during the mortgage process, making it easier to qualify and get a good rate. It can lighten the financial load once youre in the house, allowing you to split the costs of your payment, utilities, and other bills.
When you bring in a co-borrower, youll use whats called a joint VA loan. This might be a smart move if:
- Youre worried your credit, debt-to-income ratio, or lack of savings/assets may make it hard to qualify for the loan on your own
- Youre buying with a spouse, partner, friend, or loved one
- You want someone to split the costs of homeownership with
- You want the lowest interest rate possible, and your co-borrower has sterling credit
- You want to qualify for a larger loan amount than you could solo
Keep in mind that when you bring in a co-borrower, youre also at their mercy, financially speaking. Their credit score, credit history, and financial habits will play a big role in your ability to get a VA loan, so make sure you choose your co-borrower wisely.
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Va Loans Are Transferable
Believe it or not, VA loans are transferable as long as your lender allows whats called loan assumption. This happens when your lender determines that another person meets the VA loan requirements and could qualify for a loan on their own. If approved, the other person assumes financial responsibility for the mortgage.
The biggest benefit of VA loan assumption is that the person assuming the loan doesnt have to be a qualified veteran or current service member. As long as the person assuming the loan meets the lenders financial VA loan requirements, theyll be approved and able to take over the loan.
Can My Dad Use His Va Loan To Buy Me A House
The joint VA loan program allows Veterans and/or active-duty military members to use a joint borrower who is not a spouse or other Veteran. Most lenders won t allow these kinds of loans and will block Veterans from buying a home with a sister, brother, mother, father, son, daughter, or someone who is unrelated.
Divorcing Your Mortgage Education Series
VA home loan mortgages are a fantastic benefit of qualifying veterans who meet the requirements set by the Department of Veterans Affairs, but what happens to a VA loan when a couple divorces?
The VA home loan is intended for military members who meet minimum requirements. Certain surviving spouses may be eligible for the VA loan benefit at the discretion of the Department of Veterans Affairs. However, certain questions need to be considered on behalf of the divorced, non-military spouse of a veteran as well as the veteran.
Important to Note: VA loan rules arent the only regulations for VA home loans.
- Eligible VA borrowers who live in community property states may find that state law mandates how VA loans may proceed. Community property laws may dictate who has the obligation fo debts incurred in a legal marriage.
Eligibility For Children Of Vietnam Veterans
Depending on the birth defect, children of Vietnam veterans must meet several requirements to receive benefits.
For Spina Bifida
VA benefits apply to all forms and manifestations of spina bifida, except spina bifida occulta. To receive benefits for spina bifida, the childs biological mother or father must have served in:
- The Republic of Vietnam or in Thailand for any length of time between January 9, 1962, and May 7, 1975, OR
- A unit in or near the DMZ for any length of time between September 1, 1967, and August 31, 1971
AND the child must have been:
- Diagnosed with a form of spina bifida other than spina bifida occulta, AND
- Conceived after the parent first entered the Republic of Vietnam, Thailand, or the DMZ during the qualifying time periods listed above.
Unlike claimants for other VA disability benefits, a claimant for spina bifida benefits will not have to undergo a VA medical examination unless the spina bifida diagnosis is suspect. If a potential claimant has a diagnosis of spina bifida occulta, it may be helpful to seek another medical opinion.
For Other Birth Defects
According to the VA, children of Vietnam veterans with the following birth defects may be eligible for benefits:
- Cleft lip and cleft palate
- Congenital heart disease
- Hirschprungs disease
- Hydrocephalus due to aqueductal stenosis
- Undescended testicle
- Williams syndrome
To be eligible for benefits, children with the above birth defects must meet the following criteria:
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Can I Use A Va Loan To Buy A Second Home
The answer depends on what you mean by a second home. This question could mean any of the following:
- Once I have used a VA loan, can I use it again to buy a new primary residence?
- Is it possible to use my VA loan eligibility after a VA foreclosure or short sale?
- Can I buy a vacation home or rental property with a VA loan?
Interest Rate Reduction Refinance Loans
IRRRL loans are designed for homeowners who currently have a VA-backed mortgage, but who want to reduce monthly payments. Known as streamline refinancing, an IRRRL can provide a lower interest rate or convert a loan with an adjustable or variable interest rate to one with a fixed interest rate. IRRRLs are issued through private lenders rather than directly through the U.S. Department of Veteran Affairs.
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Va Loans Between Military Members And Dependent Children
At press time, dependent children are not treated the same as spouses, which means that any VA loan applied for by parent and child would be treated as though one civilian and one military member were applying for the loan.
In such cases, as mentioned above in VA Loan Basics, the veterans portion of the loan is guaranteed by the VA and subject to VA loan rules, but the civilian portion of the loan has no VA involvement. Remember, VA home loans dont allow a cosigner to offset low FICO scores or bad credit informationall applicants must financially qualify for the loan with credit scores and loan repayment history under VA loan rules.
Can A Family Member Use My Va Loan
We get many questions along these linescan a family member use the veterans VA home loan benefit? The short answer is nosiblings and dependent children cannot use the VA loan benefit. VA loan rules do not permit the children or siblings of veterans or currently serving military members to use the VA loan benefit.
Situations That Do Not Require Va Approval For A Loan Transfer/assumption
Some circumstances do not require the participation of either the holder or the VA according to VA Pamphlet 26-7. These include, but may not be limited to, the following as described on the VA official site:
- The creation of a lien or other encumbrance subordinate to the lenders security instrument that does not relate to a transfer of rights of occupancy in the property.
- The creation of a purchase money security interest for household appliances.
- A transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety.
- The granting of a leasehold interest of 3 years or less not containing an option to purchase.
- A transfer to a relative resulting from the death of a borrower.
- A transfer when the spouse or child of the borrower becomes a joint owner of the property with the borrower.
- A transfer into an inter-vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property.
- A transfer resulting from a decree to dissolve a marriage, legal separation agreement, or from an incidental property settlement agreement by which the spouse of the borrower becomes the sole owner of the property.
State law, lender requirements, and other factors may affect any/all of the above. You will need to speak to your loan officer to determine what is applicable in your situation.
When Do You Apply
There is no time limit for filing a DIC claim, but there is an advantage to filing within one year of the veterans death. If you file within one year of the veterans death, you will be entitled to retroactive benefits dating back to the first day of month after the month in which the veteran died. So if the veteran died May 5th, and you file within one year of that date, you will be entitled to retroactive benefits as of June 1st. If you do not file within that one year, you will receive benefits dating back to the month after your claim was received. In order to get your earliest possible effective date for your DIC benefits, file a claim within one year of the veterans death.
When you file a claim for benefits, the VA is supposed to automatically consider whether you qualify for any other benefits, such as for death pension or accrued benefits, in addition to DIC benefits. So if you file a claim for DIC benefits at the VA regional office but the VA does not decide on your entitlement to death pension, your effective date for death pension would be the date you originally filed for DIC, and the same is true regardless of which benefit you apply for first.
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Va Benefits For The Parent Of A Child
For a parent to receive benefits as dependents or as a surviving parent, they have to meet two requirements. First, they have to have a parental relationship to the veteran. Second, the VA considers their financial situation. If the veteran is trying to get additional compensation for their parents, the parents have to be financially dependent on the veteran. If the parents are attempting to get DIC benefits, they have to meet the income eligibility requirements.
What Is A Va Loan
A VA loan is a government backed home loan program started in 1944 available to Americans who served or are currently serving in the U.S. military. Administered by the United States Department of Veteran Affairs, the VA does not actually make home loans. The VA only protects approved lenders from loss in the event of borrower default. By guaranteeing the loan, the Veterans Administration is essentially affirming the veterans credit worthiness. A VA loan is for the purchase or refinance of the borrowers primary residence.
The three most notable features of a VA loan are:
Can I Use My Parents Va Loan
Asked by: Kim Dooley
Siblings, parents, dependent children and other relatives are not permitted to use the VA loan benefit. … Borrowers are permitted under VA loan rules of the program to apply for a joint loan with a non-veteran borrower.
nosiblings and dependent children cannot use the VA loan benefitchildren, cousins, parents or siblings can not use the VA loan eitheronly the eligible veteran and the legally married spouse can benefit from itan eligible VA borrower can allow someone else27 related questions found
Can Va Loans Be Transferred
When you buy a house, you do so under the assumption that youll continue making payments on your mortgage until the end of the loans term or you decide to sell the property. Though this is what happens for the majority of homeowners, there may come a time when you need to transfer the mortgage to someone else. But what happens if youve financed your home with a VA loan and met all the VA loan requirements set forth by your lender and still need to transfer the loan to someone else?
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What Happens To Va Loan If Veteran Dies
The veteran’s surviving family members or other beneficiaries must repay the VA loan one way or another. Otherwise, the VA will foreclose on the property. This means the lender will repossess the house, and the family will no longer have access to it, even if they inherited the property when the veteran passed away.
Qualifying For A Loan Assumption
Just like the seller qualified for his VA loan, youll have to do the same. There is one exception, though. You can be a civilian and assume a VA loan. It doesnt work to the veterans benefit, though. Heres why:
The veteran used his VA entitlement to take out the VA loan. Each veteran receives enough entitlement to purchase a home worth up to $424,100. Once they use the entitlement, they cant reuse it. In order for the veteran to buy another home, he would have to pay the original loan off in full. If he lets you assume the loan, his entitlement still remains outstanding. This means he may not be able to obtain another VA loan on his next home.
The exception to the rule is if the veteran had any remaining entitlement. This happens when they dont use their full entitlement amount. Lets say he had $100,000 remaining. He could use that amount on another home after letting you assume the loan.
However, you must qualify for the assumption. This means meeting the VAs eligibility requirements. Generally, this means a credit score of at least 620. It also means a debt ratio no higher than 41% on the back-end. Lastly, youll also need enough residual income to cover your daily expenses. The VA has a minimum amount required for each area of the country. They base this amount on the cost of living in your area. If you meet these requirements, the lender may approve you for loan assumption.
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Your Va Loan Eligibility
Remember that certain requirements apply to you the primary borrower as well as your co-signer or co-borrower.
To qualify for a VA loan as a veteran or service member, you must have served at least 90 consecutive days of active duty service during wartime, 181 active-duty service days during peacetime, or six service years in the National Guard, says Eric Nerhood, owner of Premier Property Buyers.
A Certificate of Eligibility verifying your military service history is required. Lenders can easily request this document for you when you apply.
You also need to meet loan program requirements, including:
- A credit score above 580-620
- A two-year history of steady income and employment
- A reasonable debt-to-income ratio
- Savings or assistance to cover the VA funding fee* and other closing costs
*Note, the VA funding fee can be rolled into the loan amount rather than paying upfront.
The VA mortgage program is flexible when it comes to many of these criteria.
For instance, a higher DTI might be allowed if you have good credit and/or substantial savings. Or, if you have low credit, some VA lenders will work with you to get your score up to qualifying levels.
What Are The Advantages Of The Va Mortgage
If you are eligible for a VA loan, you have access to what is considered one of the best loan products available. A VA loan has several distinct advantages over conventional loans and even FHA loans. The main advantages of a VA Loan are listed below:
A VA loan has no down payment requirement. It is the only loan product left in the aftermath of the credit crisis that offers 100% financing. This is in stark contrast when compared to the 10 20% down payment typically required for conventional loans.
No Mortgage Insurance
Even though, a VA loan provides the highest possible loan to value, there is still no mortgage insurance required. Conventional loans with less than 20% down will have PMI that can add hundreds of dollars to your mortgage payment. FHA Loans have upfront mortgage insurance as well as an annual premium.
VA loans have some of the least restrictive qualifying standards of any loan available today. VA loans allow for higher debt-to-income ratios and are more lenient about credit blemishes than other loan products. Generally, only a 12 month credit history is used when looking at credit defaults and a loan can be approved just two years from a bankruptcy discharge or foreclosure.
Low Closing Costs
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