Hey everyone, this is Hayley Thomas with C4 Elite Real Estate Team and Coldwell Banker Residential Brokerage. Today, she is talking about the Veteran Administration (VA) loans. This blog could go on for 10 pages or more, however, I am condensing it to one for now. Be sure to look for follow up videos with lenders where we will go further in depth.
We have been doing real estate here in Utah for over 14 years combined. We are finding that a lot of buyers do not understand the VA loan. Due to the proximity of our office in Layton, Utah to Hill Air Force Base, we encounter a large population of active duty members and veterans. We hope to help you learn more about this great loan program and what the requirements are for using it.
VA Loan Benefits
There are two major benefits you receive when you use a VA loan. One, is that you can finance 100% of the loan and do not need a down payment. Second, you do not have to pay for Prime Mortgage Insurance (PMI). On the other hand, there is a VA Funding Fee. This fee, which varies between 1.5 to 3.3% of the sales price, depends on how many times you have used your eligibility. Another factor is whether or not you have a down payment. Keep in mind the funding fee may not apply if the veteran has a disability rating. The funding fee is part of the final mortgage amount so you do not have to pay this amount out of pocket. Confused? It is ok. We will refer you to a great lender who can clarify the process and answer your questions.
VA Loan Eligibility
One way to qualify is if the veteran serves 90 days consecutively as active duty during war time. Second, 181 days of active service during peace time and finally, six years of service in the national guard or reserves. An interesting fact that many people do not know, is your VA loan can be used more than once as well. Furthermore, if you sell a home that you have a VA loan on, and the loan is paid in full, the full entitlement is restored for your VA benefits. If you sell and the buyer can qualify and assumes the loan, again, the entitlement is restored.
The only time that there are restrictions is if you rent a home that you have a VA loan on. You will have restrictions on purchasing with the VA until you refinance the first home our of the VA system. The maximum amount that the VA loan guarantees varies by county. It also changes annually along with values of homes. This is a good question for your loan officer or give us a call and we would be happy to get the answer for you.
VA Loan Requirements
Most lenders do have a benchmark for the credit scores and that will vary from lender to lender, however, most do require at least a 620 credit score. Similar to any loan application, you will need to have documents readily available. For example, the last two years worth of W2’s, copies of your two most recent pay stubs, documentation of other assets especially if you own your own company or are self employed. Additionally, two years of tax returns and the veterans DD-214, also known as the certificate of guarantee. If you have questions about obtaining your certificate of eligibility from the VA, your lender should be able to get that for you, Also, the lender can also pull your tax returns. Moving is difficult and often times these documents are in boxes. We can help make it easier with the right lender on our side.
Sharing from own my personal experience, I have veterans in my family, including my husband, and we have been fortunate to be able to take advantage of our VA eligibility on our current home. I am so grateful for this service and I hope that we can share this information with you so that you can benefit from it as well.
Please give us a call. We at C4 Elite RE are happy to answer any of your questions or clarify anything for you, Our job is to put you in the right direction. We will make sure your questions are answered quickly and correctly.