Empowering Veterans with VA Home Loans

A recent market report states that banks have tightened up the lending standards and that is directly impacting the demand of VA home loans. According to Trulia.com, VA home loan is one of the reasons why 79 percent of veterans are able to own a house. In contrast, if we look at the non-veteran population only 63 percent owns a home.

VA loan offers service members, veterans and their families a chance to have the house of their own and is a testament to the nation's commitment to give a better life to those who served the country. The Department of Veteran Affairs (VA) does not lend money for the loan; it partially guarantees the mortgages made through private lenders such as mortgage companies, banks and credit unions.

What Makes VA Loans Lucrative?

• Interest rate is a little lower than that of a conventional loan
• No down payment is required (in case the purchase price is lesser then the appraised value)
• Can be given to individuals with higher debt-to-income ratios and lower credit scores
• No private mortgage insurance is required on loans that have more than 80 percent of a home's appraised value
• No prepayment penalty is imposed if an individual eliminates the mortgage before the schedule
• Negotiable interest rate
• VA assistance provided to the borrowers who default the payment due to a temporary financial difficulty

Who is Eligible for a VA Loan?

Whether you are looking for VA home loans Texas or in any other state, you need to meet the eligibility criteria to get the loan approved. If you fall into any of the categories mentioned below, you are eligible for VA loan:
• Veterans
• Active-duty personnel
• Reservists/National Guard members
• Surviving spouses

Fees

The cost of getting a VA loan is less than other types of mortgages, still, there's a one-time funding fees that varies according to the amount of the down payment and veteran type. For example, if the borrower is with the armed forces and applying for the VA loan for the first time with zero down payments, he would be required to pay a fee of 2.15 percent of the total loan amount. In a scenario where the borrower makes a down payment of 10 percent, he will have to pay 1.25 percent of the loan amount as the fee. For those applying for the VA home loans for the second time without a down payment, they will have to pay 3.3 percent of the total loan amount.

The regional loan centers of VA are across the U.S. in Cleveland, Atlanta, Denver, Phoenix, Texas, St. Paul, and a few more areas. Individuals seeking for VA home loans can visit the website of VA to find out more details of the center that services the state they live in or seek assistance from a loan service company.

Everything You Need to Know about VA Home Loan Limits for 2015

Buying your “Home Sweet Home” may prove to be a tough job. In addition to finding an ideal home that meets your specific needs, you also need to consider your current financial condition. Over the years, many home loan programs have been introduced to help cash-strapped borrowers. Of these various options, a specific type of loan that has proven to be quite beneficial, specifically for veterans, is the VA loan.

Despite the numerous advantages provided by VA loans, out of the 16.4 million service personnel, only 12% take advantage of VA loans. This is because they are not sure about the rules and regulations associated with these loans. This is where mortgage loan experts can help. Mortgage specialists can provide expert information to make your process easier.

Why VA loans?
Home loans guaranteed by the Department of Veteran Affairs have grown in popularity in the recent years. The main advantage of this loan is that the VA agrees to cover up to 25% of the loan amount for lenders, if the borrower defaults in repaying the loan. This proves beneficial for homeowners as the protection allows lenders to offer competitive interest rates compared to conventional loans. If you are planning to apply for a VA loan in 2015, here are some essential loan limits that have been published by the Veteran Administration:

VA Loan Limits for 2015
The VA loan limit is the maximum that you can borrow without a down payment. Beyond the specified limit, borrowers have to pay a 25% down payment on any amount that is above the limit. The new VA loan limits came into effect on January 1, 2015. Depending on where borrowers live, they can expect variances in interest rates ranging from -42.8 percent to 8.1 percent. Though the standard limit for VA loans for most counties has remained the same ($417,000), the VA has established higher loan limits for high-cost areas.

The term “VA loan limit” can be a bit confusing for borrowers. This is because the VA does not limit you on how much you can borrow. It’s the figure that a VA-approved lender will determine depending on the eligibility, credit history and debt-to-income ratio of the borrower. The VA backs 25 percent of the loan limit for the lender in the county, region or a territory.

Can the Missed Payments in the Past affect your VA Eligibility?

VA loans have gained in popularity in recent years. According to a report by The Huffington Post, the Department of Veteran Affairs backed 630,000 mortgages for veterans and military personnel in 2013. Unique features and unmatched buying power make VA loans a preferred choice among military personnel.

VA approved lenders can help veterans understand the specifications including the eligibility criteria to obtain a mortgage. They can assist borrowers to find the right property, and also negotiate the purchase agreement. However, when veterans apply for a VA loan, lenders will analyze their past credit performance in order to determine whether or not to approve a loan. A borrower who has a history of making timely payments is considered safe. On the contrary, a borrower with a history of slow payments and delinquent accounts may find it difficult to get a loan approval. Here are some of the factors that are considered when you apply for a VA loan:

• Late Payments

When you apply for a VA loan, the underwriter will analyze your past credit behavior. A borrower who has faced some financial difficulties for a specific time period, but has maintained a good payment history, will not be disqualified for a VA loan. If you make regular and timely payments for 12 months after the date of your last defaulted payment, then the lenders consider that your credit has been re-established.

• Credit History

When it comes to VA loans, the absence of established credit history will not disqualify you from getting a mortgage. A satisfactory history of payments is preferred as it helps establish a positive credit history.

• Unpaid Judgment

If a borrower has an unpaid judgment, then his mortgage will not be approved. However, a borrower who is on a repayment plan and has an acceptable payment history may be approved for a loan.

• Foreclosure

A borrower whose previous residence was foreclosed within the last two years from the disposition date is not eligible to get a VA loan. If the foreclosure was on a VA loan, then the applicant may not have full entitlement that is available for the new loan.

According to the rules laid down for a VA loan, a borrower can’t be disqualified for missed payments during a period of financial crisis. However, in such situations, a borrower will have to provide relevant proof to show that the circumstances were beyond their control. The applicant is also required to submit a proof to confirm that the situation has been resolved.

All About VA Loans and How You Can Apply for Them

Do you often hear about VA loans and are you interested in learning what they’re all about? To begin with, a VA loan is a mortgage whose guarantee is given by the United States Department of Veterans Affairs. VA loans are meant to offer long-term financing to veterans who have worked in the American armed services or their spouses whose partners lost their lives in a service-related cause. Those who are eligible for this loan can apply for it. They can go for this loan even when they fail to get private financing. One of the major USP’s of this loan is that a borrower doesn’t have to make a down payment.

Let suppose that you are a resident of Texas. Before you go looking here and there to secure a loan, you must know that VA loans in Texas are made available to eligible and qualified veterans through direct lenders, mortgage brokers and banks. As far as the interest charged on a VA loan, it can be similar to that which is charged in a conventional mortgage.

To secure a VA loan, you need to follow certain steps. First and foremost, you must become pre-qualified to purchase a home or get a loan refinanced. For this, you have to get a pre-approval letter before you make an offer on a home. If you are buying a home and not getting a loan refinanced, you can go for a house whose closing costs don’t exceed 4% of the total amount and can be incorporated in the contract.

For a formal loan application, you will be required to furnish a copy of your purchase contract and there will be other disclosures that will require your signature. In the end, as you show some personal documents, your loan should be approved. Post the approval of your loan, you can go ahead and start closing on your new house. What will happen in the end is that you will again be signing some final loan documents and the purchase transaction as well as the transfer of ownership will be finalized. Then your new home will be all yours.

More to VA Loans Than Competitive Loan Rates

The advantage of taking out a Veteran Affairs (VA) loan is quite far reaching. The main purpose of this loan is to make life easier for active duty or retired military personnel. That is why lucrative benefits are offered to them through this program, which includes providing a guaranty on loans of up to 100% value of the property that they choose to buy. Even the funding fee from 0% to 3.15% that may be required for this loan can be financed by the Department of Veteran’s Affairs. This mortgage also provides another key benefit of zero down payment. Also, in terms of interest rates, among all the states VA loan rates in Texas are lower due to the support provided by the state.

There are some conditions to fulfil in order to get financing for a home loan under the VA mortgage program. The price of the house should not be more than the reasonable value as assessed by the department. So, the down payment will be waived only if the sale price of the house does not exceed the appraised value. However, unlike the FHA loan offered to other citizens, the veterans are not required to pay monthly insurance premiums.

Some other benefits of taking out VA loans include limiting closing costs, having a provision to allow sellers to pay closing costs, no prepayment penalty for early loan payoff and the guaranty provided by the VA department if borrowers find it difficult to make payments.

We at the Davidson Group can assist you with your VA loan needs. Our experienced loan officers can walk you through your options, and manage the complicated paperwork and official proceedings on your behalf. Over the years, we have helped hundreds of active-duty and retired military professional. We believe our veterans deserve the highest respect.

Source:  http://davidsongroup.net/mortgagepedia/posts/more-va-loans-competitive-loan-rates/