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The VA home loan is one of the best VA benefits because it enables Veterans to buy a home, build a home, and renovate a home without a downpayment. There are no specific asset requirements in regards to your eligibility for a va home loan. However, a Mortgage lender will want to see that you have enough cash on hand to cover the closing costs. Use our VA home loan affordability calculator for an estimate to save time!
In addition to cash, we may also want to see that you have other assets, such as savings accounts, retirement accounts, or investment accounts. These assets can help to demonstrate your financial stability and ability to repay the loan.
Here is a list of some of the assets that may be considered by lenders when underwriting a VA loan:
It is important to note that we will not require you to have all of these assets in order to qualify for a VA loan. However, having a good amount of assets can help to improve your chances of getting approved for a loan and getting a better interest rate.
If you are considering your eligbiilty for a VA home loan, it is a good idea to talk to a VA Loan Specialist about your specific situation. We are here to help you figure out home much house you can afford VA. Our VA Home Loan Affordability Calculator will be helpful to get started with a monthly budget breakdown.
Closing costs can vary depending on the sales price, the state, the down payment, and the loan amount, but they typically range from 3-6% of the loan amount. Utilize our va loan calculator and va loan affordability calculator.
The good news is that you may be able to negotiate with the seller to pay some of the closing costs. The VA allows sellers to pay up to 4% of the purchase price in closing costs. However, to get that it’s important you have a Military friendly Real estate agent helping you by asking the seller for this contribution. Don’t forget that if the seller is essentially reducing their sales price by making less. If the seller has a contribution built into their sales price then there is a chance the home doesn’t appraise for the sales price. In this case, the seller would be asked to lower the price to the appraised value.
Nothing has changed on VA loan requirements in 2023. A Veteran is still someone that has served on active duty in the U.S. military for at least 90 days, or for any length of time during a war or campaign. You must have your Certificate of Eligibility (COE) that proves you are eligible for VA Mortgages. You can get your COE from VA.gov or allow Security America Mortgage to obtain it rapidly directly through the VA Portal. A DD-214 is proof of your active service and is always needed by mortgage companies.
The VA does not have a minimum credit score requirement but Security America Mortgage does and so do other VA lenders. Most lenders require a credit score of at least 620 for a VA loan. It’s essential that you have the supporting income to qualify with any VA lender. If you only have a 600 then you aren’t far away and we’ll provide you guidance so that you can have a credit score that qualifies. Even if your score is under 600 we can help you with a game plan to get your score higher for qualification.
The property you want to buy will be assigned to a VA appraiser and must appraise for at least the amount of the loan. If it doesn’t you can negotiate with the seller to lower the price or walk away from the deal because real estate contracts usually protect Veteran buyers when the property doesn’t meet value.
VA loans are run through AUS which stands for automated underwriting system. Security America Mortgage uses it to evaluate your eligibility for a VA home loan. The AUS uses a variety of factors to determine a borrower’s risk, including credit score, debt-to-income ratio, and employment history. We can issue you a preapproval letter when we recieve an AUS approval. Of course, then your file goes through underwriting to make sure all the data in your loan application is correct. AUS will give a false approval if you have false information in your loan application and this will get caught during underwriting. If we don’t get an automated approval we’ll consider a manual approval if their are extenuating circumstances. A good rule of thumb is that you should have a DTI under 41% but that doesn’t mean you wont get an AUS with 43% if your loan risk is mitigated by having cash reserves, excelent credit, a down payment or other compensating factors like assets. DTI is calculated by dividing your monthly debt payments by your gross monthly income.
Reserves are liquid assets that can be used to cover unexpected expenses, such as a job loss or a medical emergency. They can include things like cash, savings accounts, and money market accounts and they help ensure that borrowers have enough money to cover their monthly mortgage payments if they lose their job or experience another financial hardship. Reserves aren’t required on VA loans by the VA and if you get an AUS approval with low reserves or no reserves that would likely be due to you have a low DTI.
The VA has a set of minimum property requirements (MPRs) that must be met for a property to be eligible for a VA loan. Requirements are designed to ensure that the property is safe, sanitary, and structurally sound. The MPRs cover a broad range of factors, including:
If a property does not meet the MPRs, it may not be eligible for a traditiional VA loan but consider a VA renovation loan or asking the seller to make the required repairs.
Many disabled Veterans are exempt from the VA funding fee. If you are eligible for VA compensation for a service-related disability, and you are currently receiving retirement or active-duty pay you are likely exempt. Further, if you are receiving Dependency and Indemnity Compensation (DIC) from the Department of Veterans Affairs as the surviving spouse of a Vet you’re probably exempt. Further, you are likely exempt with a pre discharge claim if you are active duty and received a proposed memorandum rating before we close on your va loan. Purple Heart recpients and Veterans with a 10% or higher disability are also exempt.
You can have 2 VA loans at the same time but only one can be your primary residence. For example, it’s ok if you bought a home and have an active va loan and years down the road you decide to rent that home out and build a home Your amount of entitlment has changed but it is possible to have 2 va loans at the same time. We are grateful there is no va loan limit on how many times you can use your va loan benefit. Although, the amount of entitlement that a Veteran has will be reduced each time they use a VA loan. Entitlement is the amount of money that the VA will guarantee on VA home loans. If a Veteran uses all of their entitlement, they will not be able to get another VA loan unless they restore their entitlement. There are a few ways to restore full va loan entitlement. Get a one-time restoration of your full VA loan entitlement from the VA or pay off your VA loan. Don’t forget that entitlement is not the same as a down payment and can’t be transfered.
Getting pre-approved first before starting the home or builder search makes the most sense for you, your real estate agent or your builder. Security America Mortgage is proud to offer one of the most technologially advanced loan applications because it helps ensure a smooth process. We utilize 3rd party software and you can apply now with our most seasoned Loan Officer and COO, Jason Noble. If you’re not ready go ahead and estimate your loan preapproval amount based on your income and expenses with our va home loan eligibility calculator.
The Department of veterans affairs doesn’t actually set credit score requirements. Security America Mortgage goes by your AUS/Automated Undrewriting System Findings and so do other Lenders. 620 is usually the lowest accepted but there isn’t anything set in stone. We will do everything we can to help you qualify.
VA mortgage rates are always changing and it’s best to get a quote each day. It also depends on the va loam program you choose and the day you lock in your rate.
$1,089,300 in 2023 is a high cost area. If the median home price exceeds 115% of the national conforming loan limit then it’s a high-cost area. $726,000 for subsuquent users without full entitlement in most areas with an avergage cost of living. There is no cap on the va loan amount for Veteran first-time home buyers set by the Veterans Affairs but all Lenders make their own decision. $726K is also the conforming loan limit set by the Federal Housing Finance Agency (FHFA). There are a few areas in metropolitan cities that are high-cost areas. The map below provides an example.
The VA home loan amount max is higher than conforming loan limit in some areas because the VA guarantees some of the VA home loan program, which reduces the lender’s risk. This allows Private lenders to lend more money to Veterans in high-cost areas. Use our VA home loan affordability calculator to see if you can handle a Jumbo VA loan!
According to the Department of Veterans Affairs, VA loans have “competitively “low-interest rates” You might consider conventional loans when you have 20% to put down with an automated approval/AUS because you won’t have private mortgage insurance, and there is a chance your interest rate could be less than a VA loam. Rest assured we will provide you a competitive interest rate.
Security America Mortgage is a unique Mortgage lender with a focus on helping Vets build the home of their dreams with a va one-time close construction loan. Some Vets find a fixer-upper home that needs rehabbing or doesnt meet the Veterans Affairs minimum property requirements and that’s when a va renovation loan comes in handy.
The Basic Allowance for Housing (BAH) rates for 2023 updates were released on December 14, 2022. The rates increased an average of 12.1 percent representing the largest increase in more than a decade. The increase was attributed to inflation, higher interest rates, and overall rising housing costs across the country.
The most significant changes to the BAH rates in 2023 include:
The BAH rates are created by the Department of Defense (DoD) based on several factors, including the cost of housing in a particular area, the number of service members in that area, and the pay grade of the service member. The DoD reviews the BAH rates annualy and makes adjustments as needed.
The BAH rates are important for service members because they help to offset the cost of inflation and housing. The BAH rates are not taxable, so they can provide a meaningful financial benefit to service members. Check out your BAH rates. Use our VA home loan affordability calculator with your BAH factored in to get better quote.
Basic Allowance for Housing can be used and helpful when qualifying for VA loans. We have many active duty service members who utilize this form of income. How much house I can afford VA is a frequent first question and yet another reason we provide a va home loan affordability calculator that includes any BAH you might have.
Disabled Veterans can use their gross disability income when utilizing their VA loan benefits.
Surviving spouses of military service members who made the ultimate sacrifice to our great country while on active duty or as a result of a service-connected disability are eligbile for a va home loan
The VA loan funding fee can be refunded after closing under certain circumstances. The most common reason for a refund is if the borrower is later awarded VA compensation for a service-connected disability. The effective date of the VA compensation must be retroactive to before the date of the loan closing. If you get a proposed or memorandum rating after your loan closing date, you’ll still need to pay the funding fee. You won’t be eligible for a refund based on this rating.