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.

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.

Confused between VA loans and Conventional Loans? Here’s Some Help

Buying a home in Texas may top your list of New Year resolutions. The colorful culture, mouthwatering food, the plethora of employment opportunities and of course attractive homes, makes this state a dream destination to settle down in for many Americans. However, one of the major hurdles that prospective homeowners face is financing the entire investment, especially if you are an active military member or veteran.

This is where VA home mortgage loans play a crucial role. Despite the numerous advantages that VA loans offer, it has been shown that many veterans don’t apply for one. In 2004, VA loans accounted for only 2% of all mortgage loans in the U.S. The scenario improved in 2014, as the number increased to 8%.

One of the key features of VA loans is that it doesn’t require any down payment. Also, the VA loan rates in Texas are quite competitive as compared to conventional home loan programs. For instance, you may get a conventional loan with a low down payment, but the interest rate will be higher due to the higher risks involved.

Why VA Loans?
Here are just a few reasons you might want to choose a VA loan over a conventional loan:

No Downpayment - In recent times, lenders are asking for 10%-20% down payment for a conventional loan. VA loans are backed by the federal government, as a result, banks don’t require a down payment.

No PMI – A VA loan is backed by the government so that lenders don’t need private Mortgage Insurance (PMI) in the loan amount. This is an added expense that is required for conventional loans.

Lenient Qualification Standards - The qualification standards vary for different loans. The government-backed VA loans have less stringent qualification standards as the banks assume less risk.

Assigning an Interest Rate
There are several factors that are evaluated when assigning an interest rate for VA loans. Credit score, loan amount and lender’s fee charged to the veteran and the tenure for which you need the loan are some of the essential factors that are considered. VA loans don’t require a specific credit score but most lenders ensure that it is not lower than 620. A higher credit score ensures a better loan interest rate.

The lock-in period also plays an important role in determining the loan rate. The rates on the loan can vary from day-to-day, and at times even intra-day. This is the reason why it is essential to get the rate quotes on the same day and time.

Why Choose a VA Home Loan?

When it comes to home ownership, everyone wants to put in their best effort to find the best deal. Aspiring home buyers are always on the lookout for ways to make the most out of their investment. This includes obtaining a home mortgage loan at the best possible terms.

For example, VA home loans in Texas are a preferred option for veterans in the region. These mortgages are guaranteed by the US Department of Veterans’ Affairs. VA mortgages are in place to help veterans of the American armed services or their qualifying spouses benefit from long-term financing to buy their own home.

Let’s talk about why a VA loan is the best mortgage option for those who qualify:

One of the best features of a VA loan is that it offers 100% financing. While in the current lending environment, it’s very tough to get a loan without a down payment. These loans help qualifying buyers purchase their home without making a down payment. Some FHA loans come with the lower down payment option of 3.5%, but even this figure may be unattainable for some buyers.

When opting for a VA home loan in Texas, buyers are able to free themselves from having to pay for Private Mortgage Insurance (PMI). This is because VA loans are backed by the federal government. This means huge savings for home buyers, which could amount to 0.5% to 1% of the complete loan amount on an annual basis.

Relaxed credit requirements are another highlight of VA loans. Potential buyers with less than perfect credit scores may qualify for these loans. Most VA lenders ask for a credit score of 620, which is a blessing for military home buyers. Moreover, the interest rates fluctuate based on the market and individual borrowers, and they may even fall below conventional loan rates.

Last but not the least, VA loans come with no prepayment penalty. In some cases, paying off a conventional home loan within the first five years may cause you to incur a prepayment penalty equal to about 6 months of interest. VA loan borrowers don’t have to deal with any such penalty, which makes these loans even more of a lucrative option.

In case you think that you might qualify for a VA loan, get in touch with a reputed lender in your area; someone who has rich experience in this domain. The right guidance from a VA approved lender can take you closer to home ownership.

Determining Eligibility for Texas Veteran’s Home Loans

Texas veterans home loans offer the military veterans in Texas an opportunity to own a home. The best thing about these loans is the fact that veterans don’t need to make a down payment. Also, they can receive up to 103.15% of the sale price of the property as a loan. Out of this 3.15% includes the funding fee that can be financed with the total loan amount. In order to qualify for such loans, veterans need to fulfill certain conditions.

When you choose to apply for a mortgage, the best decision you can make is to consult a respected mortgage company with qualified loan officers who can evaluate your current financial condition, assist you in understanding various loan programs and apply for a loan. They can also assist you in finding a qualified real estate agent.

When working with a loan officer on a home mortgage, they will help you through the requirements process, including proof of service and income. Here are some of the documentation requirements for veterans home loans:

1. Certificate of Release or Discharge (DD214): This form is available for retired veterans, reservists and those serving in the National Guard. The form is proof of discharge from active duty. A loan officer can assist you in filling out this form and submitting it to the lender who can help you get approved for a VA mortgage so you can begin the process of owning a home.

2. Certificate of Eligibility (COE): You will need this when applying for a loan. You can get a COE from the VA or your mortgage company can assist you in obtaining one. This certificate ensures that you meet the minimum VA loan standards.

3. Statement of Service: Active duty service members need to submit this document. This document is evidence of their active service that specifies the start date of their duty and their end date. This contains the signature of a senior officer.

Especially for Texas, there are specific mortgage programs for veterans such as the Texas Veterans Land Program being offered by the Texas Veterans Land Board. A leading company in the state assists you in choosing the best Texas veterans home loans. These experts can help you determine the best and most affordable price range based on interest rates and other costs. This is especially for veterans who have financial constraints. The mortgage company will walk you through the entire process and ensure that you make an informed decision.