Is it difficult to apply for VA loans?

Since its inception, more than 20 million people have used the VA-guaranteed home loan program to help them pay off a home loan at favorable rates. If you’re wondering how to get a VA loan and these loans are hard to come by, read more about this helpful program for veterans:

The VA does not provide home loans

The Veterans Administration does not provide the funds for home loans. Rather, the loan money is provided by many types of lenders, who participate in the program and know its requirements. If you are looking for a mortgage on a new home, always ask the lender if they participate in the VA guaranteed home loan program. Many institutions have special departments or specially trained staff to help apply for these loans. They can make sure you understand the steps involved in acquiring the loan.

A certificate of eligibility is required

VA loans require a Certificate of Eligibility documenting your past or current military service. Trained lenders working with the VA home loan program can easily purchase this document. However, in some cases, the applicant must complete a DD 26-1880 or other form online or by mail to receive the document.

You must have a reasonably good credit history

Lenders generally require applicants for the VA-guaranteed home loan program to have a credit score of 620 or higher. This requirement is to make sure you can repay the loan and have a history of paying off your debts.

Certain income requirements apply

You will need to provide documentation regarding your income to assure the lending agency that it can repay the loan. This information can be in the form of your W-2 from your place of employment, two years of prior income tax forms if you are self-employed, as well as receipts for your military pension or other sources of income.

You will pay a one-time financing fee

A one-time financing fee is required to help pay for the VA home loan program. Currently, the finance fee is 2.15 percent if you have a zero down payment. This fee is reduced to 1.25 percent if you make a 10 percent down payment on the home. These fees may vary, depending on the type of military service and how often you use your benefit.

A down payment is not always required

Your military service gives you a certain right to the loan amount. That is, the government will guarantee the payment of the loan calculated using the amount of your basic right, which is currently set at $ 36,000. However, bonus rights may also apply that can allow you to obtain a home loan of up to $ 417,000 or more, depending on the area. You can generally purchase a loan without a down payment up to this amount.

The house must be appraised

An appraiser must physically visit the property and determine its market value, based on the structure itself, as well as other homes in the area. The VA provides a list of minimum property requirements that must be included in the appraisal report. These requirements include adequate housing; if it is a residential and non-commercial property; Electrical and water systems in good working order and other details. If the property is not valued at the sale price, the buyer may have to renegotiate the sale.

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