HOME LOAN

Requirements - VA Home Loan - VA Home Loans Today

The VA Home Loan program has helped more than 19 million veterans become homeowners since 1944. Even during difficult economic times, VA loans made home buying a streamlined and relatively hassle-free process for military home buyers.

Like all government programs, there are requirements that need to be fulfilled before a service member can secure a VA loan to purchase a home, perform renovations or refinance a mortgage.

The VA insures up to 25 percent of each loan and applies its own guidelines to the program. But borrowers also have to meet any additional requirements and standards applied by an agency-approved lender. Ultimately, it’s the lender that issues a loan, not the Department of Veterans Affairs.

The VA doesn’t have any strict credit or income requirements for veterans. But lenders will certainly take a long, hard look at a prospective borrower’s credit score and overall financial profile. The lending climate has tightened in recent months. Service members need to pay closer attention to their credit and spending than ever before.

But there’s also a great deal of flexibility built into the VA loan process. Lenders don’t need to see perfect credit. In fact, the program’s flexible guidelines help scores of veterans who might not otherwise secure financing. About 80 percent of VA loan borrowers could not have qualified for a conventional loan.

There are also service requirements that determine a veteran’s initial ability to participate in the program. But a vast majority of veterans and active duty service members already qualify.

Veterans can talk to a VA loan specialist to see if they meet the eligibility requirements and obtain a Certificate of Eligibility, which is a formal government document that details a borrower’s VA home loan entitlement.

You Are in Luck With a VA Streamline Loan - Are you a Veteran feeling financial stress as a result of the economy the last few years? Are bills piling up as a result of opportunities lost while you are (were) on active duty? Does filling your tank with gasoline seem like it will break the budget? Would it help if you could lower your monthly mortgage payment; defer one or two mortgage payments and get a refund of the balance in your escrow account? You are in luck! A VA Streamline Refinance is the answer you may be looking for.

Lower your monthly mortgage payment: A VA Streamline Refinance is a government program geared to allow Veterans to refinance their current VA Mortgage to take advantage of a lower interest rate. The payment must be lower when the VA Loan is refinanced unless refinancing from an ARM (Adjustable Rate Mortgage) to a fixed rate mortgage. Generally people save between $50 and $200 per month. Current interest rates are very low so this is a great time to refinance as the lower rates than may not be available for long.

Refund of escrow account balance: Although no cash can be received as a result of the refinance, the end result is that money generally is made available for the homeowner. One possibility for having extra money is from the refund of the escrow account balance after the current loan is paid off. A few days after closing, a check for the balance remaining in the escrow account will be mailed from the lending institution.

Defer one or two mortgage payments: When you apply to refinance your mortgage, you must pay your current mortgage payment. Generally the loan closes and the loan balance is paid off within about 4 weeks and before the next payment is due. The new VA Streamline Loan will not require the first payment to be due until 4 weeks after closing. The result is that the homeowner has the money to use as needed that would normally be spent on mortgage payment(s).

Requirements for a VA Streamline Loan: The requirements are very simple and all closing costs can be included in the new loan. There is no appraisal, income or employment checks required. Basically the only requirement is that the loan has been paid on time for the past 12 months and is current at the time of the refinance.

Take the first step:

The first step toward getting your VA Mortgage Loan refinanced through a VA Streamline is to contact a lender and ask for a VA Streamline specialist. Within a few minutes you will know if you can refinance to a better interest rate and save money on your mortgage payment each month.

By Josh Swenson

Being pre-qualified (also know as "pre-approved") for a VA home loan, or any home loan, gives you more freedom and control when looking to purchase a new home. The buyer has the reassurance that they have already been approved for up to a certain amount for a home loan, and the seller knows that the buyer means business and is serious about buying a home. Pre-qualifying for a loan in not a difficult process and it will help to know what price range of house you can shop for.

In order to be pre-approved for a VA home loan there are some things you need to do:

After you have given the lender all the information they need, they will be able to tell you how much you are pre-approved for. Once you are pre-approved for up to a certain loan amount, the lender will also give you a pre-approval notice that states you have been approved for a loan for up to a certain amount, and you can show this document to sellers when you make an offer on their house. This way they know you have genuine interest in purchasing their home and are not wasting their time.

If you are interested in getting a VA loan pre-approval, this is your first step. Find an approved lender on the VA website at https://benefits.va.gov/homeloans/. This way you know your lender is approved to work with the VA and you can get your pre-approval through one of these lenders and begin house hunting.