VA Loan FAQs
VA Loan FAQs – Why is a VA Loan a better choice than a conventional loan?
VA Loan FAQs: VA Loans have many benefits not offered by conventional loans, especially for first-time homebuyers with little or no money for a down payment. Unlike conventional loans, VA Home Loans do not have private mortgage insurance requirements. Additionally, VA Loans usually have lower rates than conventional loans and are not subject to the closing costs associated with conventional loans. This is because there are certain fees that borrowers cannot be charged. VA Home Loans also give you the ability to refinance to a lower rate without having to re-qualify for the loan, a process known as a VA Streamline Refinance, or IRRRL. Getting started on your VA Loan is easy; simply contact a VA Loan Specialist at 1-855-824-6727.
VA Loan FAQs – What does it mean when I hear that a VA Loan is guaranteed?
VA Loan FAQs: This means the VA guarantees the loan to the lender in case you default on the loan. It does not mean that you are guaranteed a loan; you still have to qualify for it based on credit and income.
VA Loan FAQs – Is it true that for a VA Loan Lenders only look at the last 12 months of credit?
Yes, most of the time lenders only look at the last 12 months of credit history: however, bankruptcies, tax liens, and collections could have an adverse affect even if they are over 12 months old.
VA Loan FAQs – Does the VA offer interest only loans?
No, the VA does not offer any interest only programs at this time. On all VA Loans you pay back to the principal of the loan and gain equity with every payment.
VA Loan FAQs – Are stated or no-document loans offered through the VA Home Loan Program?
No, the VA does not offer stated or no-document programs. All loans through the VA require full documentation.
VA Loan FAQs – Is mortgage insurance required with a VA Loan?
No, the VA guarantees the lender on the loan. There is no third-party mortgage insurance required with a VA Loan.
VA Loan FAQs – Can I get extra cash at closing to make improvements on my home?
VA Loan FAQs: No, with a VA purchase you cannot get cash back at closing other than your earnest money or other money you put down before hand. If energy efficient improvements are being made to the home, the VA does allow the loan amount to go above the purchase price of the home.
VA Loan FAQs – What does entitlement of $36,000 actually mean?
Your entitlement is the amount that the VA will guarantee for your loan with the lender. $36,000 is the maximum entitlement and will allow you to purchase 100% up to $729,000.
VA Loan FAQs – Can I get the full $417,000 and then get a second loan to cover any additional amount of the purchase price?
This is allowed, but the guidelines are very strict. The second loan has to be equal to or better than what you would get with one large VA Loan. The rates on second loans are nearly always higher and, therefore, would not fit guidelines. Also, many lenders will not allow a second loan behind the VA Loan during a purchase.
VA Loan FAQs – Does the VA offer home equity lines of credit (HELOCS)?
No, at this time the VA does not guarantee HELOCS. The VA will allow you to cash out on your existing property up to 90%.
VA Loan FAQs – What is equity?
Equity is the amount of value a homeowner has in their property. You can calculate your equity by subtracting any liens or debts against your home from what your home is worth.
VA Loan FAQs – What is a discount point?
A discount point is a percentage of the loan amount you will pay to buy your interest rate lower. You can buy to a lower rate with discount points, which can sometimes save you money over the life of the loan.
VA Loan FAQs – What is a statement of service?
A statement of service is a letter from your commanding officer stating how long you have been in the service and what your status is. It is required documentation to receive your Certificate of Eligibility.
VA Loan FAQs – What is title insurance?
Title insurance is insurance you get in case a lien is found against the property after you buy it. The title company will do a thorough check to make sure that doesn’t happen. In the off chance a lien is found, you are covered.
VA Loan FAQs – What is a child care letter?
A child care letter is a letter required on a VA Loan if the borrower has children under the age of 13. A VA Loan requires that childcare expenses are counted as liabilities for qualification purposes.
VA Loan FAQs- What is the letter I have to give to my realtor?
Most of the time, the realtor will want your pre-approval letter to show that you have been approved for a loan and for how much. This is a better bargaining chip with the seller because the seller will know you are approved for the loan and won’t have to wait while you find financing.
VA Loan FAQs – Do I need to have a property picked out?
No, you can get pre-qualified before you even start looking for a property. This way you know what you can afford and what your payments will look like on the property that you end up choosing.
VA Loan FAQs – How long is the process for getting a home loan?
Many factors go into the timing of the process. To be safe, you should allow at least 30 days for the entire process to take place. However, it is possible to close in as little as two weeks. With the help of our VA Loan Specialists, the process is quick and easy!
VA Loan FAQs – Why is my local bank discouraging me from using a VA Loan?
Many local banks and credit unions are not approved to issue VA Loans. If your local bank is discouraging you from choosing a VA Loan, make sure it has the ability to issue VA Loans. For a majority of Veteran homebuyers needing close to 100% of the purchase price, a VA Loan is often the best option.
If you have questions, or if you want to determine if a VA Home Loan is actually the best financial decision for you, you may get advice from a VA Loan Specialist at1-855-824-6727.