What is a VA Loan? | Advantages of a VA Loan? | What are the Eligibility Requirements? | What Loan Programs does VA have? |

 What is GPM? | Can any Appraiser do a VA appraisal? | What is Eligibility Restoration Criteria? | What about Co - Mortgagors? |

 What are the Buyer's Cost? | What are the Seller's Cost? | Specialties for VA Loans!

What Is A VA Loan?

The Veterans Administration (VA) does not make loans. VA guarantees that the lender will be protected against loss in the event of a foreclosure up to a maximum of 25% of the loan amount. A funding fee is paid by the veteran to the Veterans Administration for each loan. VA will guarantee a loan for any eligible veteran to purchase a home provided his income will permit him to make the mortgage payments, his credit history is acceptable and he has enough cash to close the loan without borrowing.

Advantages Of VA Loans

·         No down payment required if the purchase price of the property does not exceed the VA appraisal.

·         The seller may pay any or all of the veteran's costs.

·         Less stringent loan underwriting requirements versus other types of loans.

·         Fully assumable (with qualifying).

·         No prepayment penalty.

Eligibility Requirements

To be eligible for a VA loan, the veteran must have served in the Armed Forces of the United States of America for a specified amount of time. The length of service required varies based upon the period of time he or she has served. The veteran should have also been discharged under conditions other than dishonorable.

·         Sept. 16, 1940 to July 25, 1947 - 90 days

·         July 25, 1947 to June 27, 1950 - 181 days

·         June 27, 1950 to Jan. 31, 1955 - 90 days

·         Jan. 31, 1955 to August 5, 1964 - 181 days

·         August 5, 1964 to May 7, 1975 - 90 days

·         May 7, 1975 to Sept. 7, 1980 - 181 days

·         Sept. 7, 1980 to Present - Two years

·         Currently in service - 181 days

Also eligible are unmarried widows of qualifying veterans whose deaths were service related. There are some exceptions to this schedule. Please contact us to help us make a determination of eligibility.

VA Loan Programs And Amounts

Since the VA will guarantee a maximum of 25 percent of a home loan amount up to $60,000, the maximum VA home loan amount is $240,000, inclusive of the funding fee being rolled into the loan. This maximum amount applies to all jurisdictions in the United States.

VA Jumbo Loans (greater than $240,000):

Veterans who live in high cost areas or who wish to purchase or refinance a home loan with a price in excess of $240,000 can now use their VA status to do so. In cases where the new loan amount exceeds that amount, the VA will allow the new loan amount to go up to $333,700 (conventional conforming loan maximum), with the stipulation that the veteran either put down a 25% down payment on any amount over the $240,000 or have sufficient equity in their property for that amount.

An example would be an eligible veteran wanting to purchase a new home for $265,000. The maximum VA loan amount would be $240,000 with a $0 down payment, and the veteran would need to come up with a cash down payment of 25% of the amount over $240,000 which is $25,000. This equals to a $6,250 down payment. In this example, the Veteran could purchase this home for a down payment of $6,250 and obtain a mortgage in the amount of $258,750. Because this is a Jumbo

VA loan, the funding fee must be paid in cash.

Here are some great reasons for getting a jumbo loan:

1.        Standard VA underwriting guidelines apply

2.        Higher debt-to-income ratios

3.        No private mortgage insurance is needed

4.        Competitive conventional conforming rates

GPM
(Graduated Payment Mortgage) which allows the borrower to qualify at a lower rate but requires a down payment and has negative amortization.

VA Appraisals

All VA appraisals are done by VA assigned/approved appraisers. A Certificate of Reasonable Value (CRV) is then issued, setting forth VA's estimate of value.

Eligibility Restoration Criteria

The assumption of a VA loan leaves the veteran with limited eligibility until the loan is paid off in full as a result of a true sale. Eligibility may then be completely restored and another property purchased using full entitlement.

Co-Mortgagors

If a veteran is legally married, VA will consider the spouse's income. If the veteran is to be married and the spouse's income is being used to qualify, VA will approve the loan with a marriage certificate as a condition for closing. All other co-mortgagors must meet the following requirements:

      a. Both must be veterans.

b. Both will occupy the property.

c. Both will use their entitlements.

d. Both must qualify for 1/2 of the payment.

Buyer's Costs

§         NO DOWN PAYMENT REQUIRED

§         Loan Origination Fee (1% of loan amount)

§         VA Funding Fee (varies and can be 100% financed)

§         Credit Report

§         Appraisal Fee

§         ALTA. Lenders Title Insurance Policy

§         Property Tax Propreation and Reserves

§         Hazard Insurance and Reserves

§         Interest on new loan, based on closing date

§              Recording Fees

Seller's Costs

§         Sellers' and Buyers' Escrow Fees

§         Revenue Tax Stamps

§         Standard Owner's Title Insurance Policy

§         Sub-Escrow Fee

§         Pay Off Existing Trust Deed and Liens

§         Propreation of Property Taxes

§         Payment of assessments, etc.

§         Structural Pest Control Inspection and Repairs

§         Other repairs or the cost of repairs

§         Broker fees

§         Association Transfer Fees

§         Buyers' Loan Processing Fee

§              Buyers' Loan Document Fee

And Don't Forget...

In a VA sale, the seller may pay any or all of the Veteran's costs listed above. This means that the veterany with absolutely no money out of pocket. UNDER NO CIRCUMSTANCES CE VETERAN PAY ANY OF THE SELLER'S COSTS. VA does not set interest rates, so VA rates reflect market conditions like any other type of loan. Discount points need not be charged to anyone, but the discount points to obtain a lower market interest rate can be paid by either the seller or the buyer.