The VA home loan program provides the opportunity for eligible service members and veterans, including those in the reserves and National Guard and surviving spouses to purchase a home with no down payment and without having to obtain private mortgage insurance. VA loans have relatively low and certainly attractive interest rates and lenient credit requirements. However, if you do qualify, a VA mortgage can be one of the best home loan programs out there.
Here is the detail procedure of how to apply for VA home loan
Check If You Qualify Lenders offering VA home loans must adhere to what is referred to as the VA overlay requirements. These include:
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To qualify for this benefit, you must have been involved in active duty for at least 90 days during war or 181 days in peacetime though there are some exceptions. To be considered as eligible for National Guard, the personnel must have served not less than 90 days of active duty for training.
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You cannot have any type of discharge other than an other than honorable discharge. Dishonorable discharges disqualify applicants.
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Entitlement requires a minimum level of duty in order to be triggered. For instance, you must have served for at least 24 months of active duty service consecutively and on or after September 7, 1980.
- There are also VA home loan limits in terms of the loan amount with zero down payment. These lending limits are in the line with the number of counties in the country because price of houses also differ in the country.
Gather Required Documentation As you fill VA loan application, you will be required to provide some documents to support your application.
Have the following information ready:
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DD Form 214 to confirm your military service history
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Income tax return and bank statements to prove the income and other assets of the applicant.
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Information from your credit report which shows your debt to income ratio
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Certificate of Eligibility to show that you meet the requirements
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Paystub(s) from the last two weeks to prove working status
Get Pre-Approved The first thing to do is to get pre-approved by a VA-approved lender for the financing of the home. The pre-approval letters prove that you meet the VA standards and enables you to look for houses within the given range. Information required for pre-approval includes:Information required for pre-approval includes:
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The target price you want to pay for the product
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Information about the revenue, the balance, obligations, and credit rating
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Operational military status and service history
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How much you pay upfront before the loan is granted (if at all)
In order to receive accurate quotes, share correct information about your financial standing. The pre-approval process only takes 15-20 minutes.
Searching for Your New Home Having a pre-approval letter, you will be ready to begin the search of homes within your range having been approved. Search for homes in the areas that you prefer and concentrate on houses that suit what you want in a home. Their job involves verifying the actual selling price of the property to ensure that it corresponds the fair market value. This helps buyers to make good decisions and not be ripped off.
Make an Offer Once you find the right house, you can bid directly to the sellers or through your agent. Your agent can guide you in setting a viable offer price and conditions that are reasonable to the seller. It should be noted that you are not expected to bring any money to the table on a VA loan so do not present a down payment unless you want to.
Finish the Full VA Loan Approval Process Once you get under contract, your lender arranges for an appraisal and assists in assembling documents necessary for closing. You will make disclosures and confirm all the provided financial/military service information. Full approval may take about 1-2 weeks because the documentation is being prepared.
Shop for Closing Costs While approving, begin searching for cheap fees such as title insurance, origination fees, and many more. VA closing costs are similar to those of conventional loans and range between 2% and 5% of the loan amount. The VA funding fee varies from 1. 4% to 3. 6% based on the down payment amount and the military category of the borrower.
Close on Your Home Finally, at the closing process, you sign documents, pay various closing costs, and get the final mortgage. Students are advised to carry their identification documents, and a cashier’s check to cater for any expenses incurred. Upon signing, all you get is the keys to the home! Once closing is done, the new VA mortgage borrower can move into their home immediately.
Keys to Getting Approved Following some essential tips can increase your chances getting approved for a VA home loan:Following some essential tips can increase your chances getting approved for a VA home loan:
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Maintain good credit. Target should be a total score of 660 and above. Thus, the decision to pay all the bills on time is made to be implemented from the future time.
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Reduce the debt-to-income ratio, This entails paying off as many debts as possible to reduce the overall ratio of the debts to the income earned. Reduce credit card and loan balances due.
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Build up your cash reserves for closing costs, and other unpredictable expenses. Savings also fall into this category because lenders like to know that you have cash on hand.
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Select an affordable home below the county loan limit. Do not go over the limit to ease the approval process.
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All documents should be provided at the onset of the procedure. Provide comprehensive information about income and military service, as well as any other information that the underwriting department may need.
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Don’t be afraid to ask your loan officer questions! Ask for clarification of any issues that arise during the discussion to avoid hitches in the future.
Benefits of VA Loans Some top perks of utilizing your hard-earned VA home loan benefit include:Some top perks of utilizing your hard-earned VA home loan benefit include:
No down payment – VA loans are usually taken on a no down payment basis for the eligible buyers. This makes it possible for many people to own a house.
No Monthly MI – Mortgage insurance is beneficial to the lenders as it ensures they recover their money in any way possible but it increases the monthly payment by several hundreds of dollars. VA borrowers don’t pay private Mortgage Insurance.
Lower Rates – VA loan rates are among the lowest in the market due to the guarantee offered to creditors. This will help reduce the costs in the long run of the loan.
There are a number of options for VA loan borrowers: purchase a home that may need repairs, refinance to get a lower interest rate/payment, or take cash-out for remodeling or to pay off other debts.
Home loans from VA are still very affordable for the eligible service members and veterans and they are very flexible. After this the application will likely go through without many hitches of being rejected This is according to the application guidance. When done correctly, the right VA mortgage can make the process of financing a home purchase easy and inexpensive.
