- VA guaranteed loans are made by private lenders such as mortgage
companies to eligible veterans for the purchase of home that will be their
primary residence. A veteran's VA entitlement can be used for the first home
and for subsequent home purchases.
- To get a VA loan, a veteran must apply to a lender that is able to make
VA loans. If the loan is approved, the VA will guarantee a portion of it to
the lender. This guarantee protects the lender and allows a veteran to
obtain favorable financing terms.
- There is no maximum VA loan but lenders will generally limit VA loans to
$417,000. This is because lenders sell VA loans to the secondary market,
which places a $417,000 limit on these loans.
- For loans up to $417,000, it is usually possible for a qualified veteran
to obtain no down payment financing.
- VA loans have no mortgage insurance (PMI) or prepayment penalties.
- VA loans are one of the few types of loans that are assumable upon
lender approval of credit of potential new borrower.
- Veterans need to have served under certain conditions that are outlined
on the official VA web site:
- VA loans having a 2.0% funding fee. This can be borrowed with the
mortgage. Eligible veterans with down payment are often advised to evaluate
other loan possibilities as well because the 2.0% funding fee is an
inefficient way to employ some or all of the available down payment.
- Borrowers income qualify not on the basis of debt ratio that is normally
used but on the amount of "residual income" remaining after all housing
expenses and other expenses are paid.
- The VA loan process is similar to the loan process for conventional
loans except for two significant differences. First, the borrower must
obtain a certificate of eligibility at the beginning of the process. Here,
the lender obtains the service information from the veteran, submits it
online, and returns the ACE (Automated Certificate of Eligibility). The
veteran will need to obtain Discharge form DD214 prior to this. Second, the
appraisal must b performed by a VA-assigned appraiser. Other than that, the
process is very similar to any other mortgage loan.
- VA loans can be used to purchase multi-unit properties.
- CalHFA has just become a good
alternative to the VA. CalHFA recently waived the first time home buyer
requirement for veterans. This means that most veterans can use CalHFA
instead of the VA. CalHFA tends to have much better rates than VA loans.
First Time Buyer In San
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San Diego, CA 92117