Since 1944 veterans have been able to apply for VA Home Loans to make the dream of owning a new home a reality. Today that same dream still exists. Here is the rundown of everything you need to know about VA Loans and the process of how to get one.
Basic VA Loan Requirements
Here are basic requirements and documentation that one must have in order to be approved for a loan application.
Proof of previous residences from the past two years.
Social security card as well as other important means of personal identification
Information regarding any other names you’ve gone by.
Account numbers of any savings or checking accounts you may possess as well as information such as the statement history and balances.
DD214 discharge papers as well as a Certificate of Eligibility from the local VA.
Pay or check stubs and your W2’s for the previous two years.
Information regarding any employers you may have had over the past two years.
Documentation of detailed balance sheets of your business, income statements and tax returns over the previous two years.
The Benefits and Guarantees VA Home Loans Offer
Here are some benefits as well as guarantees that VA Home loans have to offer who everare qualified.
A maximum guarantee of 25% of a home loan amount up to $104,250 dollars and a maximum loan amount of $417,000 dollars. A veteran can usually borrow the price of the value of the property as well as the initial funding fee but they must qualify.
Veterans who qualify can purchase a new home without making a down payment and can even have the seller pay 6% of the closing costs and be fully financed and backed by the VA and VA approved lenders every step of the way and never have to deal with private Mortgage Insurance companies.
No Credit History Not a Problem
No credit history does not necessarily count you out, if you can provide satisfactory records of past prompt payments you have made on things such as your rent, phone bill, electricity and other utilities as well as other household and daily expenses; doing these sorts of things is beneficial to the creation of a good credit history.
Bankruptcy is Not an Issue
If you have filed for Chapter 7 Bankruptcy you may still be approved as well, provided that you give a full explanation as to what the reason for filing was and you have re-established good credit and are steadily employed.
Debt Does Not Count You Out
If you currently owe a minor amount to a debt collection then you may still qualify and can still be approved for a VA home loan though judgments must be fully paid before closing time.
Foreclosure Will Not Hinder You
If a veteran is in foreclosure or has been foreclosed upon in the previous two years they are not eligible for a VA ensure mortgage however if the foreclosure happened on a previous VA loan then they are entitled to an entitlement for the new loan they are seeking. An entitlement can range anywhere from $36,000 dollars to $60,000 dollars depending on the exact amount of the loan.
Bad Credit will not stop you
Those who have bad credit can participate in Consumer Credit Counseling Plans until they have shown prompt payment history of bills over a 12 month period, they can then be considered for loan approval.
The Process of VA Home Loans and How to Get One
When you are approved for a VA Home loan you essentially receive your home loan from a private lender that the VA financially backs and they have certain guidelines in place to make sure that everything is done fairly. They only allow you to be charged a maximum amount for closing costs and ensure that if you repay the loan early that there can be no penalty fees.
The first thing that you will need to do when getting your VA home loan is to get a VA eligibility certificate. You can get this online or from your approved VA lender. You should then take steps to get pre-approved to make the loan process a lot quicker and ensure it runs a lot smoother.
Once you have found the home that you want to buy you should make sure negations are not vague and have been in such a way that if you do not get the loan you can escape the contract and back out without any penalty fees. The next step is that you will formally apply to a lender and complete the loan application providing all the documentation and personal information that the lender requires.
The lender will then ordered a VA appraisal to be done on the home that you intend to buy, to calculate it’s exact value and how much money they can reasonably loan you. Keep in mind that appraisal is just a rough estimation of the market value of a home.
The lending company will then review the appraisal as well as the other information and documents that you provided and decide whether or not you should be given the loan.
The final step is the closing where you will typically be required to pay a closing cost and the lender will choose the company that performs the closing. After this you can simply enjoy your new home.
You may be interested in Get a VA Loan with Bad Credit