Va Loan Requirements
If you are considering a VA home loan, then you may want to understand the VA loan requirements to see if this type of mortgage will fit your needs
. Well I will tell you, this is one of the most awesome loan products out there. Why do I say that? Because it allows for a no down payment loan. Consider the savings!!!
Before you even contemplate a VA mortgage, one of the requirements you have to meet is being or have been in the military. If you have not served in the military, no need to read further. Take a look at other loan programs to see which will suite your needs better. But if you have been in the military read on for the VA loan requirements.
VA Loan Requirements:
Obtain a Certificate of Eligibility
Loan must be for a purpose approved by the VA
Veteran must occupy or intend to occupy the home within a reasonable time after closing
Veteran must have good credit
Veteran must have income enough to make the mortgage payments and other necessary costs to maintain the home
Here is a break down of each of these requirements:
Certificate of Eligibility
This is a documents that provides proof of your military service and eligibility for a VA home loan. If you do not have a certificate, you can acquire one by making application on VA Form 26-1880, Request for Determination of Eligibility and Available Loan Guaranty Entitlement, from your local VA office. You would also include copies of your most recent discharge or separation papers covering active military duty.
VA Home Loan Purposes
The VA Mortgage is designed to help veterans toward home ownership. Below is a list of some of the approved purchases:
To buy a home.
To build your own home.
To purchase and improve a home at the same time.
To refinance an existing home loan.
To buy a manufactured home.
Occupancy Requirements
The veteran must reside in the property as their primary residence. What if the veteran is on active duty? The spouse residing there satisfies this occupancy requirement.
Credit Requirements
You will need one year of good credit history and at least a credit score of 620. So if your credit is not too good, work on your credit first so you will not have any problems qualifying for a VA home loan.
Income Requirements
Just like any other loan product, you will need sufficient income to cover daily living expenses plus your possible housing expenses for buying that sought after home. They will look at any debts you have such as car payments and credit card debts. So its a good idea to have your debts paid down when you apply. Another method they use is the debt to income ratio. When using this method the VA home loans use a ratio of the total debts including the new house payment. They usually like to see your total debts being no more than 41% of your total income this includes the estimated house payment. So take a look at what you owe. Do you have room to make a house payment?
See the requirements are not complicated. There are a couple big incentives with this type of loan product. Down payment is not a requirement so you can get 100% financing. They also do not require private mortgage insurance (PMI). Those two things allows you, the veteran, to have big savings in buying your home. Just make sure your credit and income satisfy the VA loan requirements.
by: Jeffrey S. Ragan
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