VA Loans

• Non-remarried surviving spouses of service members who have deceased in the line of service and/or military service-related disability are eligible for VA Loan benefits

Spouses of military veterans:

• who the service members were MIA
• missing in action for at last the past 90 days are eligible for Department of Veteran Affairs benefits for VA Loans

Any surviving spouse of a service member of the United States military who is classified as a disabled veteran and eligible for disability benefits at the time of death from any causes of death is eligible for the Department of Veteran Affairs benefits.

Divorce From A Service Member

Divorce members of veterans are not classified the same way as spouses of surviving members of the military.

• Situations where there is a divorce after the service member and the civilian wife has a VA Loan together can become very hairy
• This is because the Department of Veteran Affairs does have strict rules and regulations on who can live on the house that was purchased with the VA Loan
• If the VA Loan had the civilian spouse as a co-signer, the civilian spouse can live in the home and the service member can exit the property
• There will be an issue when the service member decides to get another VA Loan which is the VA entitlement
• The service member will not be able to restore their VA Loan entitlement

VA Loan Entitlement cannot be restored unless the civilian spouse sells the home and pays off the VA Loan as follows:

• pays off the VA Loan in full
• or refinances the VA Loan to another type of loan program

Factors That Affect Hurdles In Qualifying For A VA Loan

There are a few basic items to address before applying for a VA mortgage. Credit history and assets are the most important pieces of the puzzle. As mentioned above, there is no minimum credit score requirement for a VA loan, but your payment history is analyzed for qualification purposes. Also, a down payment is not needed but you still need assets to complete the transaction. These assets are used for closing costs and reserves.

Credit history:

• It is important to understand that a credit score and credit history are two separate things
• We are not worried about your true credit score, as there is no a minimum credit score requirement
• However, we do need to analyze your credit history
• Most importantly, your payment history
• A VA underwriter will examine the past 12 months of your payment history with a fine-tooth comb
• Assuming you have zero late payments and zero non-medical collections in the past 12 months, typically you do qualify for a VA mortgage
• Many lenders will tell you a 620 or even a 640 credit score is required to complete a VA mortgage

That is not true. Payment history is key for qualifying for a VA loan.

Late Payments In The Past 12 Months

If you do have late payments in the past 12 months, it does not mean your file will be denied. However, you do need a detailed letter of explanation for why you were late. Assuming your letter of explanation is accepted by the underwriter, late payments can be allowed. The letter of explanation will typically need to show a reason why you were unable to make the payment.

Such as an extended hospital stay or being stationed overseas for military purposes. If we can document the hospital stay, typically an underwriter will allow that late payment within the past 12 months. Documentation will be required to support your letter of explanation.

How To Cover Closing Costs on a VA Loan?

Closing costs can be paid for by the seller. On a VA mortgage, you may ask the seller to contribute up to 4% of the purchase price to help pay for closing costs. This is called seller credit for a seller concession. If you are not able to get seller credits, you are responsible for the closing costs. Closing costs on a VA mortgage include lender origination, escrows (taxes and insurance), title work, and any local call such as transfer stamps.

Applying And Qualifying For A VA Loan With A No Overlay Lender

How to apply for a VA mortgage? Applying for a VA mortgage with Gustan Cho Associates is very simple. First, you want to gather the following documentation:

• Last 60 Days Bank Statements – to source money for escrows and reserves
• Last 30 Days Pay Stubs
• Last Two Years W2’S
• Last Two Years Tax Returns – only needed for NON-W2 income reported to IRS
• Driver’s License
• Certificate of Eligibility

After you have this documentation, please contact Mike Gracz at (800) 900-8569 or gcho@gustancho.com. Mike will have a one-on-one mortgage consultation with you. During this call, you will go over basic qualifications. The next step will be an application. A licensed loan officer will send you an application link for the state in which the property is located. Once completed, that gives us permission to verify your credit report and start your pre-approval based on the documentation you sent in.