How do VA Loans work? Who is eligible for VA financing? Let’s answer those questions in this weeks The Mortgage Minute
The Mortgage Minute is a weekly informational series presented by Laura Borja, Your San Diego Home Loan Expert (NMLS#199107)
VA loans are loans that are guaranteed by the Department of Veterans Affairs, or VA. That guarantee is a “promise” by VA to the lender that if you default on the loan, they will cover the losses.
VA loans do not have monthly mortgage insurance which is a great advantage over other low down payment financing.
However, they do have a funding fee. The amount of the funding fee you pay depends on your situation.
VA loans typically do not the amounts typically do not require a down payment provided that you have full entitlement and that you are purchasing a home at or below the set limit for your county.
The current limit in San Diego County for VA loans with 100% financing is $612,950.
Another advantage of VA loans is that they have very flexible guidelines. Definitely compared to a conventional loan for example.
They are very forgiving when it comes to credit scores requirements, debt to income ratio requirements, and of course assets.
VA loans are meant for the purchase of a primary residence only, no investment properties. If you are active duty, you can purchase a property for your spouse and children to live in even if you are deployed or assigned to another area.
There are two exceptions to the no investment property rule
If you buy a multi unit property (duplex for example) you are able to use a VA loan as long as you will be occupying one of the units.
Streamline Refinance (IRRRL)- you can do a streamline refinance of your VA loan even if you have moved out of the property.
If you are an active duty service number, you become eligible for VA financing once you have completed 90 days of continuous active duty.
But active duty members are not the only ones who are eligible for a VA loan. Let’s take a look at who else is eligible for VA loans.
- Former Active Duty (8/1990 to present): At least 90 days of continuous active duty service or 24 months
- National Guard and Reserve Members (8/1990 to present): 90 Days of continuous Active Service OR Six years in Selected Reserve or National Guard
- Spouse of a Veteran
- If not remarried, the spouse of veteran who died in service or from a service connected disability
- Spouse of a service member who is MIA or POW
- Surviving spouse who remarries AFTER age 57 and AFTER December 16,2003
- Individuals with service as members in certain organizations, such as Public Health Service officers, cadets at the United States Military, Air Force, or Coast Guard Academy, midshipmen at the United States Naval Academy, officers of National Oceanic & Atmospheric Administration, merchant seaman with World War II service, and others
If you served outside of the 1990 to present time period, different eligibility requirements apply to you. Please contact me directly for more details.
So there you have it a quick overview of what VA loans are and who is eligible for them.
Have more questions? Ready to start the preapproval process? Contact me today!
Phone: (858) 3-LOAN-SD
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