How To Buy A House Using Va Loan
If you are a veteran, thank you for your service! The entire Capital Bank Home Loans team appreciates the sacrifices you have made in defending our country. If you are reading this, then you are most likely considering buying a home and would like to know more about VA loans. VA home loans are a terrific benefit that can help you get into your dream home.
how to buy a house using va loan
A VA loan is a low or zero-down payment mortgage option offered to eligible veterans and active duty service members and their families. VA loans are partially backed by the Department of Veterans Affairs (VA) and are issued by private lenders. Capital Bank Home Loans has been a VA lender since 2011, has closed thousands of VA loans and has some of the top ranking VA Mortgage Bankers in the business.
So what makes a VA loan so special? VA loans have special benefits only available to eligible veterans, active duty service members, and in some cases, their spouses. VA loans are backed by the government up to 25% of the loan value, making you a less risky borrower to your private lender. This gives you more flexibility in the home buying process if you are eligible.
As with most things related to finance, your credit history is an important factor in securing a VA home loan. Although the VA does not specify a minimum credit score, your private lender might. Check with your mortgage lender to see if they have a minimum credit score requirement.
Your debt-to-income ratio (DTI) is another important factor when it comes to VA loans. Again, the exact DTI for loan approval will depend on your lender and personal situation but, generally speaking, you can expect up to 45% to be the maximum acceptable DTI for a VA loan.
If you want to use a VA loan to purchase a home, that home must be your primary residence. This means that you and your family must intend to live in the home after purchasing it. VA loans will not cover investment properties or a vacation home.
This is one of the harder aspects of VA loan restrictions to explain. Before you can purchase your home using VA loans, your property must qualify. The VA will send a specially appointed VA appraiser to assess the house. Here is a good breakdown of the VA property requirements but in general, your home must be a conventional (non-unique) home in good working condition.
As long as you have enough entitlement, you can have two VA loans at one time. This often comes into play when active duty personnel are transferred and want to purchase a home without selling their existing property.
With that being said, it is still up to your lender to determine how large of a mortgage you can borrow. Your mortgage banker will determine the size of loan you can afford by assessing your credit history, income, and any assets you may be holding.
Before we jump into VA loan eligibility and the application process, we would like to mention an often overlooked topic related to VA loans. The VA funding fee is a one-time payment that you will make on a VA home loan. This fee is required by the U.S. government and helps reduce the cost of the loan for U.S. taxpayers. The VA funding fee can be paid for in a variety of ways and by no means has to be paid upfront. When you close on your VA loan, you can choose to pay the VA funding fee by rolling it into the total amount of your loan or pay the full amount at closing. The VA funding fees page has a rate chart that goes into greater detail as to how much you can expect to pay.
VA loan eligibility standards differ depending on your status in the military. There are four primary categories that the Department of Veterans Affairs will assess your eligibility from. These categories are active duty, veteran, Military Reserves or National Guard, and military spouse. You can reference the VA loan program eligibility requirements here.
If you are a conventional home buyer, you will most likely be looking to secure VA-backed purchase loans. This loan will help you buy, build, or improve a home with a competitive interest rate and the option to put no money down without restriction.
A VA-backed cash-out refinance loan can help you take cash out of your home equity. This loan will replace your current loan with a new VA loan under different terms. You can also use a VA cash-out refinance to refinance a non-VA loan into a VA-backed loan.
As a VA lender since 2011, Capital Bank has over a decade of experience with helping members of our armed forces buy their dream home. Our lenders can answer any of your questions and guide you through the VA loan process. Our own process is transparent and intuitive to provide you with the smoothest path to closing your home and getting the keys!
So we were able to approve the buyers with a primary residence, VA home loan! We were able to achieve this by thoroughly documenting the file and meeting the VA occupancy requirement. The Veteran and spouse were able to close on their new Myrtle Beach home.
How to buy a house in another state is possible! Foremost, keep in mind that if the scenario makes sense, can be verified, and we have an acceptable letter of explanation, we may be able to approve a VA loan where a borrower works a great distance from their work.
To qualify for a VA loan, you must meet certain income and credit requirements (similar to other loan programs) and have a valid Certificate of Eligibility (COE). While length of service, duty status, and conduct can also affect your eligibility for a VA loan, you may be able to obtain a COE if you belong to any of the categories below.
The views and statements expressed are deemed reliable as of the publish date indicated and may not be accurate or reliable at any future date. The views and statements provided are those of the author. Discussions regarding any financial information provided are not intended as individual recommendations and do not reflect the views or advice of Atlantic Bay Mortgage Group, L.L.C. The views expressed are subject to change at any time in response to changing circumstances in the market. Atlantic Bay Mortgage Group, L.L.C. disclaims any obligation to publicly update or revise any views expressed or information given. Loan programs may change at any time with or without notice. Information deemed reliable but not guaranteed. All loans subject to income verification, credit approval and property appraisal. Not a commitment to lend. Atlantic Bay Mortgage Group, L.L.C. NMLS #72043 (nmlsconsumeraccess.org) is an Equal Housing Lender. Located at 600 Lynnhaven Parkway Suite 100 Virginia Beach, VA 23452.
The interest rate above shows the option of purchasing discount points to lower a loan's interest rate and monthly payment. One point amounts to 1% of the loan amount and is paid at closing. Points don't always have to be round numbers. Purchasing 1.5 points would cost $4,500 on a $300,000 mortgage.
These rate offers are effective 03/28/2023 and subject to change. Rates displayed are the "as low as" rates for purchase loans and refinances. Rates are based on creditworthiness, loan-to-value (LTV), occupancy and loan purpose, so your rate and terms may differ. All loans subject to credit approval. Rates quoted require a loan origination fee of 1.00%, which may be waived for a 0.25% increase in the interest rate. Many of these programs carry discount points, which may impact your rate.
A VA loan of $300,000 for 15 years at 5.375% interest and 6.109% APR will have a monthly payment of $2,431. A VA loan of $300,000 for 30 years at 5.500% interest and 5.929% APR will have a monthly payment of $1,703. Taxes and insurance not included; therefore, the actual payment obligation will be greater. If you have less than your VA home loan entitlement, limitations to your loan amount may apply.
Most loan programs require higher down payment and credit scores than the VA home loan. In the open market, a VA loan should carry a higher rate due to more lenient lending guidelines and higher perceived risk.
VA underwriters divide your monthly debts (car payments, credit cards, and other accounts, plus your proposed housing expense) by your gross (before-tax) income to come up with your debt-to-income ratio.
Getting a VA loan for your new home is similar in many ways to securing any other purchase loan. Once you find an ideal home in your price range, you make a purchase offer, and then undergo VA appraisal and underwriting.
Converting to a conventional loan will also restore your full VA entitlements so you can qualify for a new VA loan with no down payment. But be sure to factor in closing costs as you prepare to refinance to a conventional loan.
Looking to purchase a second home, or to refinance your current mortgage, so you can become a real estate investor? Begin a loan application today to get advice from a Home Loan Expert and see how much you qualify for.
Buy a house without a down payment. It's the most significant benefit of the VA loan, especially for first-time home buyers when home prices are rising. This considerable advantage allows you to own a home without waiting years to save.
The average interest rate for a VA loan is lower than a conventional mortgage. After including your VA Loan Rate Guarantee from NewCastle Home Loans, you'll secure the best deal on your loan and enjoy an affordable monthly payment on your home.
Pay less for closing costs when you get your VA loan with NewCastle Home Loans. First, the VA limits the costs lenders can charge veterans. What's more, we waive all origination fees for veterans. Unlike other lenders, we don't charge veterans a fee for originating your mortgage. As a result, you could save an extra $1,000 just for using us.
We'll check your Certificate of Eligibility (COE), proving you meet the minimum service requirements and are eligible for VA loan benefits. The process takes minutes to complete. We need your social security number, date of birth, and permission. Start on your mortgage pre-approval now, or talk to an expert at NewCastle Home Loans about a VA loan. 041b061a72