FIVE EASY STEPS TO A VA HOME LOAN
- Apply for a Certificate of Eligibility.A veteran who doesn’t have a certificate can obtain one easily by completing VA Form 26-1880, Request for a Certificate of Eligibility for VA Home Loan Benefits and submitting it to one of our VA Eligibility Center with copies of your most recent discharge or separation papers covering active military duty since September 16, 1940, which show active duty dates and type of discharge.
- Apply to Cornerstone Home Mortgage AKA VAGUY.com for the loan.While the appraisal is being done, Cornerstone Home Mortgage will be gathering credit and income information to get pre-approved.
- Decide on a home you would like to purchase and sign a purchase agreement .
- VAGUY.com orders the VA appraisal. Current VA appraisal fee is approximately $500.00.
Once the appraisal is uploaded into the VA system, a Notice of Value is issued to show the market value of the property and any conditions of the property to be improved to bring it up to VA Standards. (as determined by the VA appraiser). When all conditions have been satisfied, your loan is ready for your legal documents are ready for you to sign. When this is completed and then recorded in your country then you will be the owner of your home.
- Close the loan and the buyer moves in.
VA Home LOAN – A GOOD DEAL FOR VETERANS
More than 29 million veterans and service personnel are eligible for VA financing. Even though many veterans have already used their loan benefits, it may be possible for them to buy homes again with VA financing using remaining or restored loan entitlement.
Before arranging for a new mortgage to finance a home purchase, veterans should consider some of the advantages of VA home loans
- Most important consideration, no down payment is required in most cases.
- Loan maximum may be up to 100 percent of the VA-established reasonable value of the property. Due to secondary market requirements, however, loans generally may not exceed $417,000 which fluctuates periodically (check with us to see what the loan maximums are currently).
- Flexibility of negotiating interest rates with the lender.
- No monthly mortgage insurance premium to pay.
- Limitation on buyer’s closing costs.
- An appraisal which informs the buyer of property value.
- Thirty year loans with a choice of repayment plans:
- An assumable mortgage, subject to VA approval of the assumes credit.
- Right to prepay loan without penalty.
- VA performs personal loan servicing and offers financial counseling to help veterans avoid losing their homes during temporary financial difficulties.
WHAT IS A VA-GUARANTEED LOAN?
These loans are made by a lender, such as a mortgage company, savings and loan or bank. VA’s guaranty on the loan protects the lender against loss if the payments are not made, and is intended to encourage lenders to offer veterans loans with more favorable terms. The amount of guaranty on the loan depends on the loan amount and whether the veteran used some entitlement previously. With the current maximum guaranty, a veteran who hasn’t previously used the benefit may be able to obtain a VA loan up to $417,000 depending on the borrower’s income level and the appraised value of the property. The local VA office can provide more details on guaranty and entitlement amounts.
WHAT CAN VA LOANS BE USED FOR?
- To buy a home, including townhouse or condominium unit in a VA-approved project.
- To build a home.
- To simultaneously purchase and improve a home.
- To improve a home by installing energy-related features such as solar or heating/cooling systems, water heaters, insulation, weather-stripping/ caulking, storm windows/doors or other energy efficient improvements approved by the lender and VA. These features may be added with the purchase of an existing dwelling or by refinancing a home owned and occupied by the veteran. A loan can be increased up to $3,000 based on documented costs or up to $6,000 if the increase in the mortgage payment is offset by the expected reduction in utility costs. A refinancing loan may not exceed 90 percent of the appraised value plus the costs of the improvements. Check with Florida Mortgage Corporation or VA for details.
- To refinance an existing home loan up to 90 percent of the VA-established reasonable value or to refinance an existing VA loan to reduce the interest rate.
- To buy a manufactured home and/or lot.
WHO IS ELIGIBLE?
Veterans who served on active duty and were discharged under conditions other than dishonorable, during World War II and later periods are eligible for VA loan benefits. World War II (September 16, 1940 to July 25, 1947), Korean conflict (June 27, 1950 to January 31, 1955), and Vietnam era (August 5, 1964 to May 7, 1975) veterans must have at least 90 days’ service. Veterans with service only during peacetime periods and active duty military personnel must have had more than 180 days’ active service. Veterans of enlisted service which began after September 7, 1980, or officers with service beginning after October 16, 1981, must in most cases have served at least 2 years.
Persian Gulf Conflict.
Basically, reservists and National Guard members who were activated on or after August 2, 1990, served at least 90 days and were discharged honorably are eligible. VA regional office personnel may assist with eligibility questions.
Members of the Selected Reserve, including National Guard, who are not otherwise eligible and who have completed 6 years of service and have been honorably discharged or have completed 6 years of service and are still serving may be eligible. The expanded eligibility for Reserves and National Guard individuals will expire September 30, 2003. Contact the local VA office to find out what is needed to establish eligibility. Reservists will pay a slightly higher funding fee than regular veterans. (See paragraph entitled “Costs of Obtaining a VA Loan”).
HOW TO GET A VA HOME LOAN
The application process for VA financing is no different from any other type of loan. In fact, the VA application form is the same as that used for HUD/FHA and conventional loans. Cornerstone Home Mortgage aka www.VAGUY.com
verifies the applicant’s income and assets, and obtains a credit report to see that other obligations are being paid on time. If all is well and the appraised value of the property is enough to cover the loan needed, the lender, in most instances, can then close the loan.
REQUIREMENTS FOR LOAN APPROVAL
To obtain a VA loan, the law requires that:
- The applicant must be an eligible veteran who has available entitlement.
- The loan must be for an eligible purpose.
- The veteran must occupy or intend to occupy the property as a home within a reasonable period of time after closing the loan.
- The veteran must be a satisfactory credit risk.
- The income of the veteran and spouse, if any, must be shown to be stable and sufficient to meet the mortgage payments, cover the costs of owning a home, take care of other obligations and expenses, and have enough left over for family support.
Cornerstone Home Mortgage aka www.VAGUY.com
will be able to discuss specific income and other qualifying requirements.
COSTS OF OBTAINING A VA HOME LOAN
The VA Funding was established as a fund to insure the loan with the financial institution in case of a default and up to 25% with the financial institutions that provide you the financing. This way you don’t have to pay mortgage insurance on your loan.
A common and basic funding fee of 2.15 percent must be paid to VA by all but certain exempt veterans. A down payment can reduce this funding fee. Subsequent users who establish their VA Eligibility can reestablish their entitlement and pay a higher VA Funding fee for 2nd time use.
NOTE: For all VA home loans, the funding fee may be paid in cash or it may be included in the loan.
(Please check with us to determine your current VA Funding Fee)
Other Closing Costs
Reasonable closing costs may be charged by the lender. These costs may not be included in the loan. The following items may be paid by the veteran purchaser, the seller, or shared. Closing costs may vary among lenders and also throughout the nation because of differing local laws and customs.
- VA appraisal
- Credit report
- Loan origination fee
- Discount points
- Title search and title insurance
- Recording fees
- State and/or local transfer taxes, if applicable
NEED MORE INFORMATION?
If you need more information, call Tim Barlow MLO#109204, 360.570.0106 and he will be happy to educate you!
Remember, VA-guaranteed financing is a benefit which Congress intended
eligible veterans should have. If you are a veteran home buyer or
know of one, it makes sense to look into the VA loan program as a
good way to finance a home purchase.