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Why would a VA Mortgage suit my needs better than other types of loans? There are many benefits associated with VA Mortgages. Not only is a down payment not necessary on a VA Mortgage, the closing costs are limited, and an appraisal is included. Also, if the house is in the construction phase, the construction will be inspected and the builder is obligated to issue a one year warranty. Should any difficulties arise, the VA is available to offer loan servicing and financial counseling.
If you have taken out a VA Mortgage before, you may still have “remaining entitlement” for use on another VA Mortgage. Currently, each eligible Veteran has an available entitlement of $36,000. If you have used this entitlement in the past, you can have it “restored” for the purchase of a different property provided the property previously purchased with a VA loan has been sold and the loan repaid in full. The entitlement can also be “restored” if a Veteran that qualifies for a VA Mortgage agrees to purchase the property and substitute their entitlement for that of the Veteran seller of the property. In addition to this, there is a one-time restoration opportunity available to those qualified Veterans who have paid their loans in full but have not sold the property acquired through the use of a VA loan. Can I use a VA Loan to buy property outside of the United States? You may not use a VA Loan to purchase properties outside the United States, territories and possessions excepted. These exceptions are: The Virgin Islands, Puerto Rico, the Northern Mariana Islands, and American Samoa.
Various clauses complicate this process, but it is possible. The Home Loan Certificate of Eligibility can be used to negotiate a home construction loan. You can then refinance the home, upon its completion, with a VA Mortgage loan. Can I get a VA Mortgage from any local lender? This may not be the case! Your best bet is to contact Mortgage Funding US, a VA approved lender. Our representatives can look over your credit history and help you figure out how large of a loan you qualify for. However, it is important to remember that different lenders may have different fees and closing costs, so don’t be afraid to make several phone calls until you find the arrangement that best suits your needs. What are my options for the repayment of my loan? There are varied repayment options on the VA’s thirty-year loans. The traditional Fixed Rate Mortgage consists of constant principal and interest payments for the life of your loan. The Gradual Payment Mortgage (GPM) begins with low payments that rise until the sixth year of the loan, at which point they level off into fixed payments. Some areas also offer Growing Equity Mortgages (GEM). With GEMs, the monthly principal payments gradually increase each month, allowing you to pay off the loan early. Early repayment of your VA Mortgage Loan does not result in a penalty. What kinds of documentation will I have to bring with me when applying for a VA Mortgage Loan? You must have a Certificate of Eligibility to apply for a VA loan. To obtain this Certificate, you must fill out VA Form 26-1880, available only from the Winston-Salem Eligibility Center. If you are not on active duty, you will also need a copy of DD-214 (Certificate of Release or Discharge from Active Duty) to obtain your Certificate. Like any loan application, you must also bring documentation of credit, savings, and employment information. Contact Mortgage Funding US for the complete list of documents you will need for this process. Are all types of military service eligible for VA Home Loans? Not necessarily. Service in World War I, Active Duty Training in the Reserves, and Active Duty Training in the National Guard do not necessarily qualify you for a VA loan. However, if you were “activated” under title 10 U.S. Code (as in the case for Iraq/Afghanistan), you are eligible for a VA Mortgage. I am a recently divorced Veteran who purchased a home with my previous spouse with the help of a VA Mortgage Loan. My former spouse now has ownership of the house. How can I get my eligibility back? You can get your entitlement back if your former spouse refinances, or pays the loan back in full. If your former spouse is a veteran they may substitute their entitlement for yours, which would allow you restore your entitlement. What is the largest mortgage I can obtain for a VA Mortgage Loan? Usually lenders do not grant VA loans of more than $417,000, though there is not an official ceiling. However in CA, AK, and HI this generally accepted limit was raised to $539,475. Can my VA Home Loan entitlement expire? If you are on active duty, your entitlement is preserved until used. When you are discharged or released from active duty before using your entitlement, your entitlement will be reassessed according to type of discharge and length of service. Do I qualify for VA loans if I am a reservist? If you received an honorable discharge, having completed 6 years in the National Guard of Selected Reserves, you are eligible for VA financing. If you have not completed a total of 6 years, but were discharged for a service-connected disability you are also eligible. You are also eligible if you were activated in or after August 2, 1990, served no less than 90 days, and received an honorable discharge. Please note that Selective Reservists will lose their eligibility on September 30, 2009. Could a VA Mortgage Loan help me buy a vacation home? Legally, you have to attest to the fact that you intend to make the property you wish to purchase with your VA loan your home. This requirement does, however, extend the occupancy provision to the Veteran’s spouse. You may take out a VA Mortgage Loan for various purposes including renovating or building a home, refinancing, buying a manufactured home whether or not the purchase includes a lot, buying and improving a lot for use with a manufactured home, and various improvements to the weatherization of your home. You may also buy a property you intend to rent out, though it can only consist of four units or less, and you must reside in one of the units. Contact a Mortgage Funding US Loan professional to discuss your options in further detail! Is a VA-guaranteed manufactured home loan right for me? If you want to purchase a manufactured home, the VA may guarantee forty percent of the total loan amount or your available entitlement, up to $20,000. This will be done through a private lender, though the VA’s guarantee serves to protect the private lender against default. Please note that the guaranty amount varies from the size of the loan available to the Veteran. What if I have used some, but not all, of my entitlement? You may use the remaining entitlement for another VA Mortgage Loan. The highest achievable entitlement is $89,912. If your income and credit are good, and the property you want to purchase appraises for the asking price, lenders will usually offer a loan of up to four times the value of your available entitlement with no down payment. You may, however, have to have a combined entitlement and cash down payment equivalent to 25% of the value or sales price of the property (whichever is less). Please note that original loan amounts for first mortgages in Alaska, Guam, Hawaii, and the U.S. Virgin Islands are now 50% higher. Also, the restoration of entitlement and the use of remaining entitlement require the completion of VA Form 26-1880.
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