A VA loan is available to active military, reservists and National Guard members. They are also available to spouses whose husband or wife died in the act of duty.
Veterans Affairs loans are attractive because they require zero down payment. A regular conventional loan requires a down payment of 20 percent. If you obtain an FHA loan then you will be required to put down 3.5 percent.
Your loan can only be used against a property you choose as your primary residence. You can reuse your loan as long as you pay it off in full each time. If you lost your loan due to foreclosure you may still be able to apply for another one.
Mortgage insurance is a fee you pay monthly included in your mortgage payment. Most lenders require that you pay mortgage insurance if you are not putting at least 20 percent down. However, with a VA loan you are not required to carry it. There is also no pre-payment penalty so you can make additional payments over time without being penalized.
How to Apply?
The VA doesn't provide the loans, private lenders do. While there are no minimum credit score requirements, you will still need to show suitable credit. A valid Certificate of Eligibility and sufficient income must also be provided. This can be obtained by you or your lender and proves you are eligible.
You can research online or contact a mortgage broker to find a lender that participates in a VA home loan program near you. Better yet, contact a VA loan specialist to guide you through the process.
There are county limits on how much you can borrow and Veterans Affairs has a limit on how much they will be liable for. Upon receipt of your application, approved underwriters will verify eligibility, debt and income.
The Inspection Process
Your lender will require a professional home inspection. Before you start the process make any necessary repairs that are easily fixable yourself.
- Make sure your basement or crawlspace doesn't smell of mildew. Inspectors look specifically for moisture and mold by examining the walls. Access moisture can attract insects and corrode the building materials.
- Roof repairs will be required if your inspector notices the shingles are moist or rotting.
- Plumbing clogs will need to be fixed and washers and dryers will be tested.
- The septic system and indoor faucets will be tested for water pressure.
- Toilets will be flushed, faucets turned on and sink drainage noted.
- Appliances will be turned on to make sure they work.
A pest inspection may also be required and you must have clearance. If this loan is being used for a refinance you may only need a title inspection.
Before the Inspection
Home inspectors are trained to make notes of everything. If there are issues that need to be addressed, work with the seller on getting those fixed or re-negotiate the sales price. If there are too many problems you can back out of the deal depending on your contract.
After said repairs required by Veterans Affairs have been made, the appraiser will come back and re-inspect the property. If all goes well and you have turned in the proper documentation you will be clear to close.
Mortgage Originator Jimmy Vercellino, specializing in VA loans, helps veterans use their VA loan benefit to their greatest advantage. For more details call us at 619-350-1951 or visit our site http://sandiego.valoansforvets.com/
The views expressed here are those of the individual author and do not necessarily represent those of First Choice Bank (NMLS #: 177877) and First Choice Loan Services Inc. (NMLS #: 210764), 959 South Coast Drive, Costa Mesa, CA 92626. Equal Housing Lender. www.fcloans.com/disclaimer/