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- What Are Netting Escrows & How Does It Work?: The Best Guide - January 2, 2024
- The Secret About Prescriptive Easement: Top Guide 1 Must Know - December 4, 2023
- About Home Equity Loans In Texas And How Can One Obtain It - November 27, 2023
About VA Home Loan Program
If you are thinking of buying a home, a VA home loan can make it happen. A VA home loan is a loan that is eligible for veterans, active duty service members, and some surviving spouses.
They often come with better terms than a traditional mortgage and can be easier to qualify. Today we will discuss 9 things you might need to know about the VA home loan In Texas.
1) Eligibility
The COE is going to determine two things, one, do you have eligibility, and what is the amount that you are eligible to purchase the home.
Second, if you are exempt from the funding fees, these two things would help the lender to determine if they can qualify you for the VA home loan In Texas.
2) Financing
VA Home Loan Program can go up to a hundred percent financing of the home sales price. The financing loan limits may vary from county to county.
If a buyer needs to purchase the property above the county limit, he or she would need to come up with a 25% down payment on any amount over the set limit.
For Example, if the financing limit is set to $450,000, and the buyer wants to buy a home, which is $500,000.
The buyer would need to come up with a down payment of $12,500, which is 25% of the amount over the limit set in the county.
You can get in touch with your county or your trusted loan officer to know the VA loan financing limits in your county.
3) Property Types
VA Home Loan Program allows you to purchase multiple types of properties. Single-family home is most popular, but you can also go up to four units which is great.
VA also allows townhouses, manufactured homes, and condominiums. However, buying manufactured homes and condos may depend on locations.
To know more about what is available in your area, you can get in touch with your trusted loan officer and get more information.
Your trusted loan officer would be in a position to let you know whether or not the property type that you are looking to buy meets the VA loan program guideline.
4) Documentation
Just because you are a veteran doesn’t mean that you don’t have to qualify based on other parameters.
Lenders would still want to check your assets and income to ensure that the loan is going to be repaid in the form of affordable monthly payments.
For military information along with DD 214 and COE, the lender would also need a statement of service from your commanding officer for active-duty personnel.
For income documentation, the lender would need your W2 forms for the last two years and the latest pay-stubs for the last one month if you are employed.
If you are self-employed, the lender would need your tax returns for the previous two years. If you are unemployed, you would need to provide award letters from the income source like social security, VA, or any other source of income.
5) CREDIT
VA helps borrowers with low credit scores compared to a conventional mortgage. VA does not have any minimum credit score requirements. However, it ultimately depends on the lender that you are working with.
We would suggest checking with multiple lenders and brokers if you have a credit score below 620. There is a chance that one of the lenders may help you qualify for the VA home loan In Texas.
6) Closing Costs
Every loan program has a closing cost associated with it. Even though VA loans have zero down payment requirements, there are still closing costs tied to them.
Closing costs include property taxes, homeowner’s insurance, title fees, lender fees, etc.
According to VA guidelines, a lender cannot charge more than one percent of the loan amount in fees. A buyer can always ask the seller to contribute towards seller concession in such a case to lower the closing cost by a substantial amount.
7) Entitlement
Many veterans who have purchased a VA home before, think that they cannot buy another VA home and that they have already used their entitlement. Once you sell your home, your full entitlement is restored.
There are three types of entitlements in a VA loan: A basic entitlement, second-tier entitlement, and full entitlement.
A qualified veteran could borrow four times of the full entitlement based on the area and location of the property. So based on this, an eligible veteran can also have more than one home with a VA loan program.
8) Appraisals
The VA appraisal process is one of the most competitive methods that is designed to protect veterans. The appraisals for VA loans also works in the same way as any other conventional loans.
However, the process for the VA home loan program maybe a little more stringent compared to other loan programs because of a hundred percent financing.
9) Refinancing a VA Loan
We discussed purchases with the VA loan program. But can you refinance a VA loan? The answer is yes, you can!
You can refinance your VA home loan just like any other conventional loan. You can also do a cash-out refinance with VA loans if required.
Conclusion
VA home loan program could be one of the most competitive loan programs out there. It gives the best of the benefits to the veterans with a good home buying experience.
Knowing the VA loan program may help you to be prepared for buying or refinancing your home.
