WHAT IS A VA LOAN?
A VA loan is a mortgage loan issued by lenders that are guaranteed by the U.S. Department of Veterans Affairs. The program was created to help returning service members purchase homes without needing a down payment or a great credit score. The VA program has generated more than 22 million VA loans to help veterans, active duty military members and their families to purchase homes. Like all home loans VA mortgages have considerable details and information to review. Here is a quick outline on what is a VA loan and how to apply for one.
VA LOANS VS. TRADITIONAL MORTGAGES
VA loans are among one of the only 0% down home loans available on the market today, compared to conventional loans (which require up to 20% down) or FHA loans (which require 3.5% down). No PMI (Private Mortgage Insurance) is required! PMI is an insurance which is required by the lender if you finance more than 80% of the homes value. This extra PMI is added to your monthly mortgage, which in most cases can be removed once you have 20% equity in your home (not for FHA loans though). Call or email Manuel R. Lopez for more information on this!
Since VA loans are backed by the government banks take on less risk making qualifying for a VA loan much easier then qualifying for another type of loan program when you have to put less then 20% for a down payment.
WHO IS ELIGIBLE FOR A VA LOAN
To be eligible for a VA home loan veterans, active duty members, National Guard members and spouses of military members who died while on active duty are all eligible (must meet the basic requirements set forth by the Department of Veterans Affairs). You may be eligible for a VA home loan if you meet one or more of the following:
– You have served 90 consecutive days of active service during wartime
– You have served 181 days of active service during peacetime
– You have more than 6 years of service in the National Guard or Reserves
– You are the spouse of a service member who has died in the line of duty
STEPS TO A VA HOME LOAN
1) Select a VA Approved Lender
Only lenders approved by the U.S. Department of Veterans Affairs can originate VA mortgages (contact Manuel Lopez and he can refer you to an approved VA loan specialist). Using a seasoned VA lender/loan officer with extensive knowledge about the VA loan process compared to a lender/loan officer who only funds a few VA loans a year translates into a easier/quicker loan process.
2) Obtain a Certificate of Eligibility (COE)
A Certificate of Eligibility is a document that your lender will need that proves that you meet the eligibility standards for a VA home loan. It lets the lender know how much entitlement you can receive (amount VA will guarantee on your loan). If you do not already have your Certificate of Eligibility you can usually obtain one by visiting the Department of Veterans Affairs or through the eBenefits portal at www.va.gov
3) Get Pre-Qualified with a VA Approved Lender
Before heading out to look at homes for sale it is very important to get pre-qualified first. Getting pre-qualified will help you know what purchase price you can afford and/or what price you need to be at for the monthly mortgage payment you want per month. Giving your lender/loan officer complete details during the pre-qualifying step can help prevent surprises later during underwriting. As I mentioned in Step 1 I have good, qualified lenders ready to help, just give me a call or send me an email and I would be more then happy to assist you.
4) Go House Hunting
The 4th step is the one borrowers love the most…house shopping!! Working with a Real Estate professional (like myself!) who specializes in the VA process can help you understand and negotiate what VA allows; for example, the VA requires certain fees to be paid for by the seller that needs to be incorporated in the offer. Only a knowledgeable agent will know this and help you negotiate the seller paid fees. Also, a knowledgeable Realtor will help determine which homes are eligible for VA financing as ALL homes are not!
5) Lender Processes Application
Once you locate a house to buy and have a signed/accepted purchase contract in hand this is the document you will need to finalize your initial application. Once a contract is accepted this is when your inspection period begins, this is where a licensed home inspectors (one that you choose and pay for) inspects the home and determines what, if any, repairs are needed. If repairs are requested this is when we ask the seller to do the necessary repairs that are of most important to you. Then, once the inspection period is over this is when your lender/loan officer will order the VA appraisal. Here again not just any appraiser will do, only a professional who is certified to perform appraisals to VA standards can evaluate the home being considered. The VA appraiser will do the following; making sure the price you’ve agreed to pay for the home corresponds with the current value in the area/subdivision, to inspect the home to make sure it meets the VA minimum property requirements, and to inspect the land that the home sits on passes VA standards. Once the home passes the VA appraisal process and it’s verified by the lender this is when the underwriter will give his or her stamp of approval!
6) Close on Your VA Loan
After being approved by the underwriter, all that is left to do is close and move in! Closing is a step that requires you to sign documents that confirm you understand and agree to the terms of the loan. Once you’ve signed all your closing documents, the very next day once its confirmed that your name has recorded with the County Recorders office, you’ll get the keys to your new home!
TO START YOUR VA LOAN ADVENTURE AND TO BEGIN GETTING QUALIFIED GIVE ME A CALL AT #602-790-3286 OR SEND AN EMAIL TO REOMANUEL@GMAIL.COM…YOU CAN ALSO VISIT WWW.MILITARY.COM, WWW.VETERANSUNITED.COM OR WWW.VA.GOV/HOMELOANS FOR MORE INFORMATION
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