How Do I Apply For A Va Loan
You can easily and quickly have a lender pull your certificate of eligibility to make sure youre able to get a VA loan.
Most mortgage lenders offer VA home loans. So youre free to shop and compare rates with just about any company that catches your eye.
Whats more, VA-specific mortgage lenders are actually some of the highest-rated on the market. Here are a few wed recommend checking out.
Step by Step Guide
Pros And Cons Of A Va Loan
There are a lot of VA benefits that make these mortgages the right choice for veterans. But no loan program is perfect, and even VA loans have their downsides.
|Funding fee adds to overall loan cost|
|Several property types are eligible||Cannot be used for investment properties|
If you have good credit and plenty of savings, you might choose a conventional mortgage over a VA loan. Putting down 20% on a conventional mortgage means you skip private mortgage insurance and the VA funding fee, so youll save money all-around.
And if you have excellent credit, you may score a low interest rate on the conventional loan as well.
Va Loans In Nc And Sc
At Dash Home Loans, we offer plenty of options for home loans to make sure that you find the one best for you. For many of our military families, that best option is usually a VA home loan.
As approved VA home lenders, we want to make your home loan experience the best that it can be. Thats why we assign a Dash Mortgage Coach to each borrower, to guide them through each step of the VA loan process.
We offer VA home loans in NC and SC. If you live in the Carolinas and want to buy a home as a veteran, contact us. Dash Home Loans can help.
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Other Uses For A Va Loan
While a VA loan is often used to purchase a home, it can also be used to construct a home. Its also possible to use VA financing for a cash-out refinance or in conjunction with the Native American Direct Loan program. Finally, you can also use your VA loan benefits with adapted housing grants. This can be a big help if youre struggling with homeownership.
Who Qualifies For A Va Loan
For those who are eligible, VA loans are attractive because they dont require a down payment. They also have lower interest rates than many other types of mortgage loans you can get for similar terms. They dont have monthly mortgage insurance.
Although lenders set their own requirements for certain aspects of qualification, VA loans have more lenient credit requirements than many other mortgage programs.
Not all who have served in the Armed Forces qualify for a VA loan. You must meet at least one of the following criteria to qualify:
- Served 181 days of active service during peacetime.
- Served 90 consecutive days of active service during wartime.
- Served more than 6 years of service with the National Guard or Reserves or 90 days under Title 32 with at least 30 of those days being consecutive.
- Are the spouse of a service member who lost their life in the line of duty or as the result of a service-connected disability. You generally cannot have remarried, although there are exceptions.
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What Are The Va Loan Limits
If you’ve never used the VA loan program before, you likely have full entitlement, and there is no cap on the amount the VA guarantees. Regardless of the loan amount, the VA will guarantee up to 25% of the loan if you default.
But if you have previously used a VA loan, you may have to contend with a cap based on your county’s loan limit. But take note: this only refers to the amount the VA will guarantee. How much you can borrow is determined by the lender.
Is There A Va Loan Commuter Rule
In a sense, yes, theres a commuter rule. But the VA does not explicitly describe distance requirements, leaving lenders to calculate commuter expenses on their own.
Newcomers to the VA loan program often inquire how far theyre allowed to live from a place of employment. VA loan borrowers must intend to occupy their home as their primary residence. Generally, there can only be so much distance between the home and the workplace, at least before it can take a toll on what you can afford.
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Who Is Liable After A Va Loan Is Assumed
If a veteran home buyer wants to purchase your house and assume a VA loan, it is possible to swap your entitlements. Basically, the veteran homebuyer will use their VA entitlement and in so doing, your VA entitlement will be restored. When this happens, the VA who will assume your mortgage will be liable in the event of a default.
On the other hand, if a civilian wants to purchase your home and assume a VA loan, they dont have a VA entitlement to substitute for yours. This means, your entitlement will remain tied up to the original mortgage. If the non-veteran home buyer who assumed the VA loan defaults on the loan, you can still be held liable. Aside from that, the civilian who assumed your house and mortgage may sell the property to someone else, and you will still be held liable for any losses related to the mortgage.
The buyer must sign a release of liability so the seller will no longer responsible for the mortgage once its been assumed.
Can You Transfer A Va Loan To Another Person
Are VA loans transferable? Yes, a VA home loan can be transferred to a veteran or non-veteran individual who wants to purchase a house through a process called VA loan assumption as long as the person assuming the loan meets the income and credit eligibility requirements set by the lending institution.
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How Does The Va Loan Process Work
If you’ve never applied for a VA home loan, you may wonder how a loan is finalized and what you can do to get things started. Obtaining a VA loan is much like securing a conventional mortgage, but with a few extra steps. Weve outlined the steps below to help ensure you don’t miss any important requirements.
Va Loan Limits And Entitlement
Due to recent legislation, VA borrowers with full entitlement can borrow as much as they can afford without a down payment – essentially meaning, VA loan limits don’t matter.
However, if you have diminished entitlement, typically from one or more active VA loans, VA Loan limits come into play, and you may need a down payment.
In either case, VA loan limits aren’t a cap on what you can borrow, only on what you can borrow without a down payment. Suppose you don’t have sufficient entitlement and you’re required to bring money to the table. In that case, the down payment requirement is typically 25 percent of the difference between price and your available entitlement.
The VA loan limit for much of the U.S. is $548,250 . That means most Veterans have $137,062.50 in VA entitlement .
If you purchase that same home in the example above for $500,000 and are currently using $40,000 of your VA entitlement, you’ll need to bring $27,937.50 to the table.
- $137,062.50 – $40,000 = $97,062.50 in remaining entitlement.
- $97,062.50 x 4 = $388,250 .
- $500,000 – $388,250 = $111,750 .
- $111,750 X .25 = $27,937.50 required down payment.
It’s a lot of math, but fortunately, your lender can run all these calculations for you.
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What Are The Different Types Of Va Loans
Purchase loan: If you’re planning to buy a home, a basic VA purchase loan will help you get decent interest rates with private mortgage lenders.
Native American Direct Loan: This loan is available to Native American veterans or veterans married to Native Americans to buy, build or improve a home on federal land.
Interest Rate Reduction Refinance Loan: If you’re struggling financially to keep up with your VA loan, an Interest Rate Reduction Refinance Loan can help make your monthly payments smaller.
Cash-out refinance loan: If you’re looking to make improvements to your home, pay off debt, or make strides toward your retirement fund, the VA can back cash-out refinance loans.
What Happens When Someone Dies With A Va Loan
What happens to the VA loan if the borrower dies before paying off the debt in full? Assuming a VA loan after death means the surviving spouse will be responsible for the debt. If the borrower is single but has a co-borrower, then they will take over the debt. If the deceased borrower has neither, the borrowers estate will handle the debt. The VA loan could also be assumed by an eligible buyer who could be a veteran, non-veteran, or even the children of the deceased owner of the original loan.
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Advantages Of Va Home Loans
Without a doubt, the VA home loan program offers some of the most generous benefits to qualified cadets, service members and veterans buying a home. Between the loose credit requirements to the generally lower interest rates, there are many reasons to start your mortgage search with VA-qualified lenders.
Closing Costs And Fees
Home loans generally come with closing costs and fees, and VA loans are no exception. You may be able to roll your closing costs into your mortgage and pay them off over time, rather than up front. Your closing costs may include, but aren’t limited to:
- Courier fees
- Recording fees
VA loans also come with a funding fee. If you’re applying for this type of loan for the first time and you’re not planning to make a down payment on your home, that fee will equal 2.3% of your home’s purchase price. For subsequent applications, it’s 3.6%.
If you’re able to make a down payment, your funding fee will be lower. For a down payment of 5% but less than 10%, you’re looking at a fee for 1.65%, regardless of whether this is your first VA loan. For a down payment of 10% or more, it drops to 1.40% for a first or subsequent application.
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Are There Any Special Fees I Should Expect To Pay
Yes. While VA loans usually involve fewer costs, there are still some fees you need to pay. One fee unique to VA home loans is a VA Funding Fee. This fee is paid directly to the Department of Veterans Affairs. The funding fee is set at a maximum of 3.6% until 2023.
If youre looking for a way to reduce the funding fee, you can choose to make a down payment of at least 5%. You may avoid paying the fee in certain situations such as if youre currently receiving disability payments due to your military service. Active duty service members who show proof they received the Purple Heart are also exempt.
Who Is Eligible For A Va Loan
You must meet at least one of these requirements to qualify for a VA loan:
- Be an active member of the military, or be an honorably discharged military veteran
- Put in 90 consecutive days of active service or more during a period of war, or 181 consecutive days of service or more during a period of peace
- Have more than six years of service in the National Guard or Selective Reserve
If you have a spouse who died in the line of duty, you may be eligible for a VA loan as well, even if you never served yourself.
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Va Loan Residency Requirements
Borrowers are reminded that a summer or seasonal home does not meet the VA regulations But the VA does allow for whats known as intermittent occupancy. It’s also worth noting that the above guidelines are the VA minimums, and financial institutions could feature more strict controls on how far the borrower can live from work with the home purchased with a VA mortgage?
If you need assistance in this area, talk it over with your lender and with a representative from your nearest VA Regional Loan Center.
What You Need To Apply For A Va Loan
If youre ready to get a VA loan, these are the steps youll usually take:
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Military Home Loan Rate Quotes Available Here
If you have military experience and would like to know whether youre a qualifying VA borrower, complete a short online form.
Well let you know if you qualify, or what you still need to become eligible. If you qualify now, well give you a rate quote, the home purchase price you qualify for, and your estimated monthly payment. From there, well issue a pre-approval so you can start house shopping and make your homeownership dreams a reality.
Please contact our support if you are suspicious of any fraudulent activities or have any questions. If you would like to find more information about your benefits, please visit the Official US Government website for theDepartment of Veteran Affairs or the US Department of Housing and Urban Development.
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Can Existing Va Borrowers Lower Their Interest Rates By Refinancing A Va Loan
On top of that, its also possible to reduce your interest rate by refinancing a VA loan through the interest rate reduction refinance loan . This loan requires you to use additional VA financing to replace your current loan and comes with an upfront VA funding fee of 0.50% of the loan amount.
In the end, the VA loan program can be a big help to those who have sacrificed their country and want to achieve the dream of homeownership.
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How Long Does It Take To Close On A House With A Va Loan
Closing times vary and depend on each buyer’s situation. But according to mortgage software company Ellie Mae, closing on a house with a VA loan takes an average of 4550 days a pace in line with doing so with a conventional mortgage. To help ensure a speedy closing time, have the proper documentation at the ready to complete your loan application.
S To Starting The Process And Finding A Home
Apply for your VA-backed home loan Certificate of Eligibility
Youll need to show your COE to your lender as proof that you qualify for the home loan benefit.Apply for your COE now
Look at your current finances
Go over your credit profile, income, expenses, and monthly budget to make sure youre ready to buy a home. Decide how much you want to spend on a mortgageand be sure to include closing costs in the overall price.To learn more:Use CFPBs mortgage calculator
Choose a lender
Remember, youll go through a private bank, mortgage company, or credit unionnot through usto get your loan. Lenders offer different loan interest rates and fees, so shop around for the loan that best meets your needs.Be prepared to pay lender fees. Many lenders charge Veterans using VA-backed home loans a 1% flat fee . Lenders may also charge you additional fees. If you dont know what a fee is for, ask the lender. In some cases, lender fees are negotiable.To learn more:Read about the VA funding fee and other closing costs
Choose a real estate agent
Get recommendations for potential real estate agents online or from relatives, friends, and neighbors. Then meet with several agents to find one you like.Read all agreements before signing with an agent. Make sure you understand any charges, fees, and commissions as well as your rights and obligations in the buyer-agent relationship.
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