Facts About VA Home Loans Veterans Do Not know
This guide covers facts about VA home loans Veterans do not know. VA loans are the most popular loan program in the United States. However, not all home buyers or veterans can qualify. Home Buyers need to be veterans in one of the branches of the United States Military with a Certificate of Eligibility (COE).
Over 22 million active servicemen, women, and retired veterans live in the United States. Many retired military members do not know facts about VA home loans.
Less than 10% of our veterans utilize this great benefit by the U.S. Department of Veterans Affairs available to our active and retired military members. Such low veterans are taking advantage of VA loans due to the facts about VA home loans they do not know. Countless eligible veterans are bypassing taking advantage of the best loan program in this country.
Top Reasons Why Veterans Do Not Utilize VA Home Loans
There are many reasons why veterans do not utilize VA home loans. Many veterans are paying high rent, and their rent payments often are higher than if they were homeowners making their mortgage payments. Most who do not participate and take advantage do not know the great benefits and facts about VA home loans.
Any home buyers think of red tape when they think of mortgages and try to avoid even looking into it. The mortgage process, especially VA mortgages, is not as difficult as it may seem, and there is no reason to stress.
In this blog, we will explain how simple and streamlined the VA home loan process is for home buyers. The Key to simplifying the VA mortgage process is having a VA lender with no overlays. Gustan Cho Associates Mortgage Group is a five-star national mortgage company licensed in multiple states with zero overlays on VA home loans. Qualifying for VA loans is easier than any other loan program. The Department of Veteran Affairs has much more lenient guidelines than HUD, USDA, Fannie Mae, and Freddie Mac.
100% Financing With No Down Payment and No Closing Costs
Besides USDA loans, VA mortgages is the only other mortgage program in the U.S. that does not require a down payment on a home purchase. All purchase and refinance loan transactions have closing costs. Closing costs are loan origination and third-party charges both home sellers and buyers must pay. However, a loan officer can structure a file where home buyers do not have to pay closing costs on a home purchase. Most borrowers normally do not pay a dime and walk out with the keys to our VA loan program.
How To Avoid Paying Closing Costs On VA Loans
Department of Veterans Affairs allows 4% sellers concessions by sellers to offer homebuyers for closing costs: If borrowers are short of closing costs with seller concessions, the lender can offer lender credit instead of higher mortgage rates. FHA loans require a 3.5% down payment, and Fannie and Freddie require a 3% to 5% down payment on Conventional loans. VA loans do require a one-time upfront VA funding fee. However, the VA funding fee can be rolled into the loan balance. There is no mortgage insurance premium required on VA loans.
Facts on VA Loans Veterans Do Not Know About Qualification Requirements
VA has the most lenient guidelines out of any loan program. This section will cover some facts on VA loans compared to FHA Loans. VA and HUD have two-year waiting periods after the Chapter 7 Bankruptcy discharge date. VA and HUD allow borrowers to qualify for loans 12 months in a Chapter 13 Bankruptcy repayment plan.
The VA nor FHA does not have waiting period requirements after the Chapter 13 discharge date. However, if the bankruptcy has not been seasoned for two years, it needs to be a manual underwrite.
There is a three-year waiting period after the housing event (foreclosure, deed-in-lieu of foreclosure, short sale). VA shortens the waiting period to two years after the housing event. VA and FHA do not require borrowers to pay outstanding collections and charged-off accounts. Deferred student loans for 12 or more months are excluded from debt-to-income calculations on VA loans. HUD requires 1.0% of the outstanding student loan balance to be used as hypothetical monthly debt.
Facts About VA Home Loans on Fees and Costs
There is no down payment required on home purchases. All loan programs have closing costs. However, VA allows up to 4% sellers concessions by home sellers to offer buyers. If the borrower is short to cover closing costs with seller concessions, then the lender can offer lender credit to borrowers instead of a slightly higher rate.VA does not require mortgage insurance.
There is a one-time funding fee is required on all VA home loans, which is collected to set up a pool to cover the costs of defaulted loans to keep the guarantee to lenders.
There is no set fee like the upfront FHA mortgage insurance premium of 1.75%. The funding fee varies between 0.50% to 3.3% of the mortgage loan balance. The amount charged as the upfront VA Funding Fee is dependent on the type and history of the service by veterans. There are instances where the upfront Funding Fee is waived. Service-connected disabled veterans are exempt from paying the upfront funding fee.
How Many Times Can Veterans Use Their VA Eligibility COE
Veterans can use their Certificate of Eligibility (COE) repeatedly. Facts about VA home loans Many veterans do not realize that a VA loan is not a one-time use only. There are no limits on how often veterans can reuse their Veterans Certificate of Eligibility unless they have foreclosed on prior VA loans. Even if veterans foreclosed on prior VA loans, they still may be eligible depending on the loss the VA took. If veterans use a VA loan, sell their home, and pay off their old VA loan, they can reuse the full entitlement of their VA loan for their next home purchase.
Spouses of Surviving Veterans Are Eligible
Department Of Veterans Affairs rewards surviving spouses of deceased veterans by offering them VA entitlements. However, spouses cannot be remarried. Only unmarried spouses of fallen veterans killed while serving can qualify for VA entitlements to purchase or refinance homes. The upfront VA Funding Fee is waived for eligible spouses. Offering this benefit is a way of our government’s gratefulness for the fallen members of our military services.
Not All Lenders Have the Same VA Requirements
Private lenders originate and fund VA home loans. One of the most important facts about VA home loans that home buyers do not know is that not all lenders have the same VA lending requirements. All lenders need to abide by and meet VA Guidelines. However, every lender can have higher credit and income standards for borrowers.
Lenders require higher lending requirements are called lender overlays. Most lenders have overlays on VA mortgages.
Gustan Cho Associates has zero lender overlays on government and conventional loans. Over 80% of our borrowers are folks stressing over their mortgage process due to their current lender overlays or getting a last-minute mortgage denial. Facts About VA home loans Just because borrowers are told they do not qualify by one lender does not mean another cannot qualify them.
Facts About VA Home Loans Is Veterans Can Get 100% LTV Cash-Out Refinance
Home prices have been increasing nationally in the past few years. Facts About VA home loans is that VA allows 100% cash-out refinance mortgages. Even with the highest mortgage rates since 2008, home buyers are not stopping. There are more home buyers than an inventory of homes in the Continental United States.
Both the Federal Housing Finance Agency and HUD increased loan limits for two years in a row due to rising home prices. Homeowners can take advantage of rising home values and qualify for cash-out refinance VA loans.
Other facts about VA home loans is they allow up to 100% cash-out refinance mortgages. Cash-out refinance mortgages have higher mortgage rates than traditional rate and term refinances. After a cash-out refinance mortgage, homeowners can do a rate and term Interest Rate Reduction Refinancing Loan, or IRRRL. Interest Rate Reduction Refinance mortgages do not require home appraisal nor verification of income. It is called VA Streamline Refinance, and it is very easy and streamlined. IRRRL normally closes in two to three weeks max.
Lending Requirements By Lenders With No Overlays
VA has the most lenient mortgage lending guidelines than any other loan program. The Department of Veterans Affairs realizes that veterans may have less perfect credit than their civilian counterparts. This is due to them being deployed for extended periods and unable to pay their bills on time.
Most lenders have lender overlays on VA home loans., Gustan Cho Associates has a national reputation for being able to close on VA loans that other lenders.
Gustan Cho Associates is a lender with no overlays. Over 80% of our borrowers are folks who could not qualify at other lenders due to that particular lender having overlays. Keep in mind that just because homebuyers cannot qualify with one lender does not mean they cannot qualify with another lender.
Types of Properties Allowed With VA Home Loans
Veterans can purchase owner-occupant one to four-unit homes with VA loans. Veterans can also purchase condominiums and manufactured homes. Condominium loans are considered riskier investments by lenders. Condo home buyers can purchase condominiums that are approved condo complexes.
VA requires non-deferred student loans to take 5% of the outstanding student loan balance and divide that amount by 12 months, the hypothetical monthly student loan debt.
Condo buyers can search a list of VA-approved condos by clicking on this website condo search tool. Just because the condo is on an approved list for one year does not mean it will be on the approved list for future years. Check the approved condo community list before entering into a real estate purchase contract.
Qualifying For A VA Loan With a Lender With No Overlays
Gustan Cho Associates is a national five-star mortgage company licensed in multiple states with no lender overlays on VA loans. Gustan Cho Associates goes off the findings of the automated underwriting system and has zero lender overlays. To qualify for a VA loan with no lender overlays, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.
