Let’s take a look at some of the biggest benefits of VA mortgages and dig deeper into why this program has become such a lifeline for military homebuyers:
Benefit 1: No Down Payment
Qualified veterans don’t need to make a down payment to purchase a home. It’s almost difficult to overstate just how incredible this benefit is in the current real estate market.
The amazing benefit of being able to purchase with $0 down helps veterans and active military members get a slice of the American Dream.
Benefit 2: Relaxed Credit Requirements
As many prospective homebuyers know, lenders have tightened their credit requirements over the last five years. But the kind of score you’ll need to secure VA financing is typically well below what you would need for a conventional mortgage. Right now, VA lenders are generally looking for a credit score of at least 620.
Benefit 3: No Private Mortgage Insurance
VA borrowers don’t have to pay private mortgage insurance, which saves veterans money each month. VA home loans do come with what’s known as the VA Funding Fee, which is a fee the VA applies to all purchase and refinance loans. Borrowers with a service-connected disability are exempt from paying this fee. VA loans feature more flexible and forgiving credit and debt-to-income requirements than conventional and FHA financing.
Benefit 4: Flexible DTI Ratios
No matter the loan program, you’ll need to have a healthy balance between your monthly income and your monthly revolving debts. The VA standard is 41 percent. But it’s possible to go even higher on a VA loan — up to 55 percent and more — depending on the lender and your ability to hit additional requirements. This benefit gives veterans more financial breathing room and can make it easier to qualify for the loan amount you desire.
Benefit 5: Closing Cost Limits
All mortgages comes with fees and closing costs. But the VA actually limits what veterans can be charged when it comes to these expenses. Some costs and fees must be covered by other parties in the transaction. These safeguards help make homeownership affordable for qualified homebuyers.
VA borrowers can also ask a seller to pay all of their closing costs, which can add up depending on the loan amount. There’s no guarantee the seller will agree to that request, but veterans can certainly ask during the negotiation process.
Benefit 6: Fighting Off Foreclosure
No loan program has had a lower foreclosure rate than VA loans over the last five years. That’s pretty remarkable considering that about 9 in 10 homebuyers don’t put any money down. The VA mortgage program has emerged as a safe harbor for several reasons, including the VA’s residual income requirement, which was mentioned earlier. The VA itself has also done a tremendous job advocating for veterans in jeopardy and working to ensure they stay in their homes.
The VA guaranty program isn’t just about getting veterans into homes. It’s also focused on helping veterans keep them. The VA mortgage program is a hard-earned benefit. It’s also a lifelong one that you can use over and over again.
Benefit 7: Once Earned, It’s Yours for Life
One of the most common misconceptions about the VA mortgage program is that it’s a one-time benefit. In fact, those who’ve earned it can use this program over and over again throughout their life.
So please don’t let anyone tell you that using your home loan benefit decades ago means you’re no longer eligible
Benefit 8: Rebound From Foreclosure or Bankruptcy
Veterans who’ve experienced a foreclosure or bankruptcy don’t automatically lose their shot at a VA home loan, even if they defaulted on a VA-backed mortgage. In those cases it’s more a question of how much VA loan entitlement the borrower has remaining, since at least some will remain tied up in that foreclosed property.
It’s generally a two-year wait after a foreclosure or a bankruptcy discharge to pursue a VA home loan. Prospective buyers will often encounter a longer “seasoning period,” as they’re called, on conventional and FHA loans, which can mean more renting or other less-than-ideal housing situations. Some service members and veterans who declare Chapter 13 bankruptcy may be able to qualify for a VA home loan just one year after their filing.
If You have any question please give me a call at 602 620 2936
Information obtained from Veterans United Network