Veterans have this awesome financing program called VA home loan which allows them to have an affordable mortgage. This they can use to purchase or refinance a home. It offers great benefits to over 18 million Military Veterans in the United States.
However, Military Veterans aren’t the only individuals who can benefit from this financing. National Guard Members and Reservists may also qualify.
The best proof you can have that you’re eligible for a VA loan is the Certificate of Eligibility or COE. Even Reservists and members of the National Guard must have this document.
To be eligible for a VA home loan, a Reservist or National Guard member must have served at least six years. Moreover, one must meet any of the following:
- Must Have been discharged from service with an honorable status
- Must be a retiree
- Must have been transferred to Standby Reserve
To prove the length of time you’ve served as a Reservist or National Guard Member, you will have to provide some specific documents. This depends if you’re on active service or currently inactive.
For active Reservist or National Guard Member, a Statement of Service duly signed by your commander must show the amount of time you’ve served and your personal information.
For those who have separated from the reserves, you may provide NGB Form 22.On the other hand, NGB Form 23 is needed for retirees.Check today's rates, click here.
So, You’re Eligible? Now, You have to Qualify
While a Certificate of Eligibility (COE) proves that you may be eligible for a VA loan, it does not follow that you are qualified for one.
You must qualify for the loan, too. This time you have to prove you can afford this kind of financing. To do that, you need to meet certain VA home loan requirements.
Minimum Credit Score Requirements
To start, VA does not have any set minimum credit score requirement for a borrower to qualify for a VA loan. However, some VA-approved lenders may require set credit score requirement overlays.
Is this allowed? Yes, it is. This is because VA only guarantees VA loans. Lenders are the ones who provide the financial backing for these loans. Some lenders may not accept scores lower than 620, although this varies per lender. However, there are still many who won’t require any minimum credit score.
This is why you are encouraged to shop for a lender to find one whose requirements work for you.
DTI Ratio Requirements
Debt-to-income or DTI ratio requirements are also something VA doesn’t require. Instead, what VA wants to know is your disposable income.
Disposable income is the money left from your monthly income after you’ve paid your obligations. Different areas in the country may have varied disposable income requirements.Find the best mortgage rates, click here.
For VA, the kind of property you purchase with a VA loan matters.
If it’s a single-family house you’re buying, it may be easier for you to qualify for a VA loan. However, if you choose a condo or a unit in a multifamily building, it may take you a little more time to get qualified.
VA must approve both the development and the association. A certain questionnaire must be accomplished and submitted together with other essential papers to VA. VA then determines if the association satisfies the requirements.Connect with a lender, click here.
Down Payment, Funding Fee, and Mortgage Insurance
One major advantage if one chooses to fund a home purchase through VA financing is the low to zero is the down payment.
This means that the money can go towards closing costs of the monthly mortgage payments instead. Moreover, a monthly mortgage insurance is not required.
What Reservists and members of the National Guard need to pay is the VA funding fee which is 2.4% of the loan amount on their first loan.
To learn more about VA home loans, talk to a VA-approved lender for free. You may ask more questions about the program. This information will help you decide whether a VA home loan is perfect for you.Click to See the Latest Mortgage Rates»