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Current and former military members put on skills in communication, leadership, and teamwork for the duration of their service.
Besides these skills, other benefits include education financing, travel discounts, and Department of Veterans Affairs (VA) home loans.
The creation of VA Home loans came as a part of the Servicemen’s Readjustment Act of 1944.
This act was made into law in an effort by the U.S. Congress to help veterans coming back from war 2 by making homeownership more attainable for them.
Given that, VA home loans have helped over 24 million veterans become homeowners.
VA loans have a number of the simplest benefits out of any government-guaranteed loan, which is a component of the rationale these loans are considered the simplest by most experts.
The most notable benefits of those loans are not any deposit, lower monthly mortgage payments, no-prepayment penalties, and no mortgage insurance premiums.
Unfortunately, many veterans aren’t using their VA home loan benefits, the foremost prominent reasons being that they’re unsure said benefits exist if they qualify, or the way to go about using them.
Here, we re-evaluate six simple steps for eligible applicants to use their well-earned VA home loan benefits.
Step 1: Meet Eligibility Requirements
When applying for VA home loans, the first step is to ensure that the applicant meets the eligibility requirements set by the VA.
These embrace meeting military service, income, credit score, and property necessities as defined by the VA.
However, determining property eligibility requirements is done afterward once the applicant finds a home they like.
Military Service Requirements
Most current and former members of the military already meet VA home loan eligibility requirements.
However, for people who might not be sure, service eligibility requirements are:
• 90 consecutive days of active duty wartime service.
• 181 days of active duty peacetime service.
• Six years of service if a member of the National Guard and military reserves.
• Surviving spouses are also eligible, so long as their significant others passed away while on service or due to a service-related disability.
Income Requirements
Eligible applicants must have a steady income while also taking care of any outstanding debts and compensating factors. Acceptable income sources include:
• Full-time job income.
• Social security.
• Retirement/pension.
• VA disability income.
Some incomes have a two-year continuance requirement.
• Part-time job.
• 1099 income.
• Self-employment.
• Seasonal job income.
Incomes from support payment and alimonies require a three-year continuance. Some incomes aren’t eligible for VA loans and these are GI bills, Basic Housing Allowance (BHA), unemployment, cash payment, and workers’ compensation.
Credit Score Requirements
The VA doesn’t have a selected credit score requirement; however, experts recommend that applicants have a credit score of 620.
Lower credit scores will still be able to qualify, but lenders will think about other things like lower scores like late payments, reported collections, and existing mortgages.
Step 2: Go Through Pre-Approval Process
Once the applicant meets eligibility requirements, they ought to apply for a Certificate of Eligibility (COE).
This certificate will show the lender that the applicant meets all the wants supported by service history and duty status.
The next step will be to go through the pre-approval process. Here, the applicant will meet with a lender and obtain pre-approved for an amount and start trying to find a home.
However, it’s essential to notice that the quantity the applicant is pre-approved for isn’t final which it’d change once the knowledge is confirmed.
Step 3: Find Representation
After the applicant gets a pre-approval letter and a COE, they’re going to take a subsequent steps to seek out a realtor.
The realtor’s job will be to represent the applicant and find them the best deal available for them.
They will do that with information available for them from the COE and therefore the pre-approval letter and find a home that the applicant wants and may afford.
Step 4: Find Eligible Property
Like all other eligibility requirements listed in step one, the property must be eligible for a VA home loan. Eligible properties include:
• Single Family Homes.
• Multi-Family Complexes up to four units.
• VA-approved Condos.
• Double-wide mobile homes on permanent foundations.
• Manufactured homes on a permanent foundation.
Eligible properties must haven’t any health and questions of safety or be during a flood hazard area without flood insurance.
Not qualified properties are timeshares, cooperatives, or non-VA-approved condos.
Step 5: Perform a Property Appraisal
Applicants that meet all eligibility requirements, including property eligibility requirements, will have to go through a property appraisal which a third-party appraiser does.
An appraisal on the property will require the appraiser to inspect the property and compare it with other places in the same market based on value, trends, and sales prices.
Real estate experts recommend that applicants hire an independent inspector to examine the property and make sure that they meet all health and safety standards.
The inspector, unlike the appraiser, will focus solely on the property, which might include the structure and electrical wiring, among other things.
Step 6: Signing Your Loan Documents
Eventually, after everything is done and all inspections are finished, the next step is to sign all final documents with an underwriter verifying their accuracy and validity.
The underwriter will ensure that the applicant’s income, service, credit score, and property meet all eligibility necessities.
Once all closing documents are signed, the applicant will develop into a homeowner.
Reference Source: Indusrty Analysts
