Many military members will decide to use a VA loan for the purchase of a home. With 100% financing (no down payment required) and other specific benefits, this is the best type of mortgage for those who qualify. Obtaining a VA loan is not difficult if you know the 5 key elements for a VA loan approval.
Borrowers who apply for a VA loan must be eligible. While satisfying the service requirements is a must, the amount of entitlement is also important. Entitlement is the amount that the VA will guarantee for the borrower.
VA loans are used for financing primary residences (owner occupied properties) that are eligible. Acceptable properties are single family homes, VA approved condos, multi-family homes (up to four units) and townhouses. Manufactured homes that are attached to a permanent foundation are also eligible.
When securing a VA loan, the borrower must occupy the home that is financed. Eligible borrowers will verify that they will occupy the home within a reasonable period of time, usually within 60 days after the loan closing has taken place. When refinancing with a VA streamline (IRRRL), the borrower only needs to certify that they have occupied the home in the past.
VA loans require that the borrower must qualify for the mortgage. They must have have steady and enough income to satisfy the VA guidelines and lender’s guidelines. Also, VA loans take into consideration residual income to cover normal and typical living expenses that the borrower has each month.
When refinancing with the VA IRRRL(streamline), income for qualifying is typically not required unless the new loan is for a shorter term and the principal and interest (PI) payment is 20% or more than the original PI.
Borrowers must have acceptable credit to obtain a VA loan. It is up to the lender to decide if the borrower is a safe risk according to VA guidelines. In addition, VA lenders may set their own credit score minimums that are acceptable for a VA loan.
While these are the very basic VA loan requirements when qualifying for a VA loan, there may be other VA guidelines and lender requirements that apply and must be followed. Loan amounts also vary according to the area in which the property is located and the borrower’s ability to pay.
Very often, a key element for a VA loan approval is the choice of a VA lender that the borrower chooses to use for the mortgage transaction. Remember, using a national VA lender who specializes in VA loans is always the best bet since they are knowledgeable of all the VA guidelines. In addition, an online nationwide VA lender that is also a bank and uses a correspondent (wholesale) channel is able to offer you the most competitive VA mortgage rates and costs while also the servicing and backing of a National Bank.
Are you ready to discuss a VA loan with a National VA lender for your home purchase? Need to know if you meet the five key elements for a VA loan approved. Feel free at any time to contact me for more information about VA loans, how much home you can afford to buy and how you can achieve a 100% financing VA loan.
My loan process was very easy and quick. Not to mention a great loan rate. I couldn't be happier!
Capt Sam T. - US Army
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