VA Loans

  • A VA loan works the same as most other home purchases, with a buyer making a written offer to purchase a home under specific conditions (price, closing cost assistance, other contingencies), and then going through an approval process with a lender.
  • The key difference with a VA loan is that the department of veterans affairs requires that all homes purchased through this program meet certain habitability requirements. They will send out a home inspector and appraiser to make sure that the home is in good working order and is worth what you are paying. This step may sometimes cause delays, especially if repairs are needed after the inspector looks around. issues at the home do not necessarily mean that the buyer cannot use the VA loan, just that repairs will need to be done before the home purchase can be completed. The VA recently started offering a VA loan to be used for homes that need renovation on a limited basis.
  • VA loans offer buyers the opportunity to finance the entire purchase price of a home, eliminating the need for a down payment. However, it’s crucial to qualify for the loan by meeting credit and financial requirements. Lenders assess creditworthiness and the ability to make mortgage payments. If facing financial challenges, lenders may require debt reduction or savings accumulation before approving the loan.
  • There may be closing costs to consider, including expenses for title recording and legal paperwork preparation. These costs can be negotiated with the seller, and it’s advisable to discuss them with your realtor prior to submitting an offer for a home.
  • VA refinance allows eligible borrowers to replace their existing mortgage with a new VA loan.
  • The primary goal of a VA refinance is to obtain better loan terms, such as a lower interest rate or monthly payment.
  • VA refinance options include Interest Rate Reduction Refinance Loan (IRRRL) and Cash-Out Refinance.
  • IRRRL is designed to refinance an existing VA loan to a new loan with a lower interest rate, often without the need for an appraisal or income verification.
  • Cash-Out Refinance allows eligible borrowers to access the equity in their home by refinancing for a higher loan amount and receiving the difference in cash up to a 100% LTV.
  • VA refinance requires meeting certain eligibility criteria, such as having a VA loan entitlement and meeting credit and income requirements.
  • The VA refinance process involves submitting a refinance application, gathering necessary documents, and working with a VA-approved lender to complete the loan transaction.

General Guidelines:

  • Gift for down payment and closing costs is permitted.
  • For a 2-4-unit property purchased and occupied by the Veteran, a minimum of 6 months PITI reserves is required.
  • The VA Funding Fee, which may be exempt for Disabled Veterans, is included in the loan amount.
  • Sellers can contribute towards the Veteran’s Closing Costs.
  • It is an excellent program for first-time homebuyers and those looking to move up.
  • Eligible property types include single-family attached/detached homes,
  • VA-approved condominiums, 2-4 unit properties, Leaseholds with proof of prior VA Approval, Accessory Dwelling Units, Modular and
  • Manufactured Homes.
  • No mortgage insurance