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October 8, 2012

VA Loan Program Ensures Zero Down Home Financing for Military Borrowers

Category: VA,VA Home Loan News – admin – 5:21 pm

The Department of Veterans Affairs guarantees special home loans for borrowers that have an affiliation with the United States Armed Forces. The VA loan program is unique because they provide military vets home loans with zero down-payments required. For example, the Federal Housing Administration insures the most popular program for first time home buyers but the borrower must come up with a 3.5% down-payment, whereas, the VA program approves 100% home loans without any form of a down-payment.

The VA program also separates itself from conforming financing in that the borrower must meet the VA loan eligibility to qualify for veterans loans. The VA does not set loan limits like the FHA, however the loan size can be limited by the type of mortgage. The maximum guaranty for certain liens in excess of $144,000 is 25% of the $417,000 loan limit. The loan limit for a 1-unit home is $417,000 so the maximum they will guaranty is $104,250.

If you are looking for a company that offers home loans with zero down, then Home Loan Wholesale can help connect you with multiple sources. This month, we announced that Nationwide would be our featured lender for military loans with nothing down.

The Veterans’ loans can be for buying houses or refinancing and can be used for a number of different transactions including:

  • Traditional House Buying
  • Refinancing Home Construction
  • VA Loan Assumptions
  • Standard Mortgage Refinances
  • Streamlines, AKA, Interest Rate Reduction Refinance Loans (IRRRLs)
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March 14, 2011

VA Home Loan Requirements

Category: VA Home Loan News – admin – 2:16 pm

If you think you may fulfill VA loan requirements, you could be eligible for great benefits with VA home loans.  However, you may be preventing yourself from getting your hopes up until you understand every aspect of VA loan eligibility.  Here are the top points required of you to be accepted for VA loans. VA rates continue to be offered at extremely low interest rates.

The first topic of VA loan requirements is to have a certificate of eligibility.  This will be your proof of military service, which is the foremost requirement for VA loan eligibility.  If you do not currently possess proof of military service length, since you need to prove that you served for at least four years, you can obtain one from your local VA office.  It is also helpful for you to provide discharge papers if you are in the reserves or no longer serving.

Basic Prerequisites to be Approved for a VA Home Loan

Then, there are income requirements to be approved for a VA mortgage loan.  You will need to show income that can be documented as proof that you can pay your monthly mortgage and other costs involved with residential upkeep.  Along with having income that can be documented, your lender will also look at your other debts.  If you can, pay off outstanding debts before you apply to increase your chances of acceptance.

To qualify for a VA loan program, you must also meet occupancy requirements.  This means that either you or your spouse must reside in the property as your primary residence.  If you are on active duty, your spouse can meet this VA loan eligibility requirement by living permanently at the residence being financed with VA loans.

Like any other mortgage loan, VA home loans require you to have a certain credit score to qualify.  You should have a solid year of good credit history and a score of 620 or higher.  If you fail to meet this important aspect of VA loan requirements, you can work on your credit prior to applying for your VA home loan so you will not run into further problems.

The last of the VA loan requirements is that you obtain your loan with income that can be documented and proof of military service for an approved purpose.  These include buying a home, building your own home, purchasing and renovating a home at the same time, or refinancing your current home loan.  By meeting all of these conditions for VA loan eligibility, you will soon benefit from your time in the armed forces as you obtain your new home.

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June 5, 2009

Refinance or Mortgage Modification with Bad Credit or No Equity

In a recent article, California mortgage broker, Jeff Morris, formerly with GMAC and Ditech estimated that one in ten of homeowners who visit him online are able to get approved for a conventional or FHA-refinance.  Morris said, “People simply don’t qualify with the mortgage lenders tighter guidelines and lack of home equity.“ Borrowers seeking home refinancing, outside of California, Arizona and Nevada may have a better chance because fewer borrowers in the mid-west and south are under water with their mortgages being greater than their home’s value.  Even with mortgage lenders extending 97% FHA and 105% mortgage refinancing, California homeowners have little opportunities to be approved because home values have declined so significantly since they bought their properties years ago.   

 

The goal should be for homeowners to invest in a home that they can afford and if refinancing with a lower mortgage payment is an option, then borrowers would be foolish not to seize the savings opportunity. Morris added that “the demand for loan modifications has not waned and he sees an increase in loan workout requests for borrowers who are stuck in jumbo mortgage loans that have interest rates set to adjust.” The banks just aren’t handing out loan modification agreements to just anyone anymore.  Homeowners seeking foreclosure prevention alternatives from their mortgage lender must be able to document that they have the income to support the modified home loan payment. 

 

In Maui, Caleb Palmer, a broker, said “Consumers should stop whining about things they can’t control and focus the affordable home buying opportunities that have become available since the housing market crashed in 2006.” Palmer continued, “Mortgage rates were under 5% for thirty year fixed rate loans and inventories were beginning to open up in neighborhoods that haven’t been available for years.”  Palmer believes that 2010 will see more buying opportunities in Hawaii and California before the market shifts back to appreciation mode. 

 

In addition, if you’re older than 40, shortening your mortgage term now could help leave you mortgage-free in retirement, reducing the income you’ll need to generate from your battered 401(k).
But before you jump in, you should know that most single-family home loans today need to fall within Fannie Mae and Freddie Mac limits — up to $417,000 in most places, and up to $729,750 in certain high-cost cities such as San Francisco and New York. “Jumbo” mortgages, or those larger than those limits, are still very hard to find. Then you’ll need two crucial and tough-to-acquire bits of information: your credit score and your home’s current value. Those will determine whether you can refinance at all and how close you can get to the lowest rates available. Even then, you may find the process unusually long and unpleasant; some banks are taking up to 90 days to complete a refinancing.  If you got your current mortgage in the past few years, when less documentation was needed, you may be surprised by the financial colonoscopy that awaits you. You need pay stubs, bank statements, brokerage statements and maybe tax returns to convince the lender that you can and will repay the loan. If you’re self-employed, you may be asked for a profit-and-loss statement for this year; if you rely on bonus income, expect the lender to assume this year’s bonus will be a lot less than last year’s.

 

What is home equity? Having some equity in your house is essential to qualifying for a new mortgage loan. If your current mortgage is less than 80% of the value of your home or less than 75% of your condominium, you should have refinancing options as long as you don’t have late mortgage payments and bad credit scores.  Subprime refinancing and bad credit mortgage options have disappeared with the exception of VA and FHA loans.  VA home loans are only offered to military veterans and FHA mortgage guidelines require full income documentation and most bad credit home loan applicants need a stated income program.

 

If your mortgage is between 80% and 105% of your home value, you’re current on your payments and your loan was bought by Fannie Mae or Freddie Mac, you may be able to refinance under a two-month-old government program called “Making Home Affordable.” Some kinks are still being ironed out, and Fannie and Freddie have different requirements, so go to the program’s Web site at MakingHomeAffordable.gov or contact your mortgage servicer to see if you qualify.


Sometimes under this program, Fannie and Freddie will waive appraisals and other underwriting steps. And if you’re refinancing a Veterans Administration or Federal Housing Administration loan, a new appraisal isn’t needed. 

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June 3, 2009

Streamline for VA Home Loan Refinancing

Mortgage brokers continue to report that FHA mortgage and VA home loans are the hottest products in the home financing sectors of the U.S.  The VA provides low mortgage rates for streamline programs to veterans who currently have a loan guaranteed by the U.S. Department of Veterans Affairs.  In addition to the VA streamline refinancing, Mortgage Related News reports that and VA loan officers are originating the Interest Rate Reduction Loan at a high volume than previous years because this VA loan has no “seasoning” requirement.

 

In the mortgage industry, this type of seasoning refers to borrowers who recently completed a mortgage refinance transaction.  In addition, these VA loans entail very little documentation and usually do not require an appraisal. In order to qualify, borrowers must have a VA home loan that is not delinquent. In a recent VA mortgage article, Tom Kelly highlights the opportunity that military veterans and their families have financing and refinancing with VA home mortgage loans.  He points out that one of the simplest ways for homeowners who have a VA mortgage is with the VA streamline refinance. 

 
VA mortgage lenders will assess that veteran borrowers meet basic program requirements including:

·         The new monthly mortgage loan payment must be for less than the original loan.

·         The VA mortgage rate must be for less than the original loan (unless refinancing from an adjustable interest rate).

·         The term cannot exceed thirty years or ten years more than the original mortgage term (up to a max of 360 months).

After 50 years of offering loans only to vets who served active duty, the VA changed its rules in 1992. Men and women who have completed six years in the Army, Navy, Air Force, Marine Corps or Coast Guard Reserves, or the Army National Guard or Air National Guard, are eligible for VA home loans, including programs with zero down required. 

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