Home Loans By Nicole Newton

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VA Loans

Provides flexible, low-interest mortgages for members of the U.S. military (active duty & veterans). VA loans do not require a down payment or PMI.

VA Home Loans

100% FINANCING

VA mortgages are one of the few ways you can buy a home with no down payment.  Generally speaking, the VA gives lenders a guarantee of 25 percent of the loan amount up to a certain limit.  This is known as the VA guaranty. For the lender, that’s like having a 25 percent down payment, which is a substantial amount.  So you can finance 100 percent of the cost of your home.

LOW VA MORTGAGE RATES

As with other types of loans, current VA mortgage rates fluctuate depending on market conditions. VA mortgage rates today may be different from VA mortgage rates next week or even tomorrow. This is why it’s important, when shopping for a VA loan from various lenders, to get all your rate quotes the same day, preferably within a few hours of each other, so you can make an accurate comparison of the rates VA lenders are offering.

FLEXIBLE CREDIT REQUIREMENTS

borrowers who have little or no established credit history – they’ve never had things like credit cards, auto loans, etc. or made little use of them – can sometimes qualify for a VA mortgage using what’s called alternate credit history.  That uses records of things like payments for rent, utilities, cell phone service, internet services or other things billed regularly to show a record of reliably making payments on schedule.

What are VA Home Loans?

VA loans are a great benefit for eligible veterans, their surviving spouses, and service members. They give you the opportunity to qualify for a low-cost mortgage when you’re looking to purchase or refinance, even if your credit isn’t perfect.

If you currently serve in the military or are a veteran, you are probably eligible for a VA loan. Here’s what you need to know about these special government-backed loans.

What are VA Home Loans?

VA loans are a type of home loan that mortgage lenders issue to qualified veterans, active service members and spouses. They’re backed by the government through the Department of Veterans Affairs (VA). Because of this backing, lenders often issue loans to candidates that could otherwise be considered risky.

How do VA Home Loans work?

An important thing to note is that the VA does not issue VA loans, but they do determine who qualifies for one and which lenders can issue them.

VA loans offer many rewards over conventional loans, including lower interest rates, more tolerant borrowing requirements and no down payment due at closing for qualified borrowers.

5 VA Loan Benefits for DFW Area Home Buyers

Summary: The Dallas-Fort Worth metro area has a sizeable military population. As a result, there are many home buyers in the area who could benefit from using a VA-guaranteed home loan. The VA loan program offers many benefits for Dallas-area home buyers. Today, we’ll examine 5 VA Loan Benefits .

Most military members and veterans in the Dallas area are eligible for the VA loan program. It’s open to just about anyone who has served in the military, under honorable conditions. And there’s a lot to like about this program.

Congress created the Department of Veterans Affairs (VA) home loan program in the 1940s, to reward servicemembers in the wake of World War II. It has been going strong ever since. Today, VA loans give home buyers the ability to purchase a property with no money down. But that’s just one of the benefits.

Benefit #1: You could buy a home with no down payment.

If you use a VA loan to buy a home in the Dallas area, you could potentially finance 100% of the purchase price. In other words, you could buy a house with zero money down. This is arguably the biggest benefit to using the VA loan program.

Numerous surveys over the years have shown that the down payment is the biggest obstacle to homeownership. But in many cases, it’s only a perceived obstacle. In 2018, a joint report from the Urban Institute and Freddie Mac stated:

“Yet most potential homebuyers are largely unaware that there are low down payment and no down payment assistance programs available at the local, state, and federal levels to help eligible borrowers secure an affordable down payment.”

For decades, the VA loan program has enabled military members and veterans to buy a house with no money down. So much for that obstacle.

Benefit #2: You could avoid paying mortgage insurance.

Home buyers in the Dallas area who put down less than 20% on a home purchase usually have to pay for mortgage insurance. These specialized insurance policies are often required when the loan-to-value (LTV) ratio rises above 80%.

This is another major benefit of using a VA loan. Borrowers who use this program can typically avoid paying mortgage insurance — even when they put no money down. As it states on the Department of Veterans Affairs website: “With a VA loan, you also avoid steep mortgage insurance fees.” All of this translates into a more manageable monthly loan payment.

Benefit #3: Seller concessions and closing cost contributions are allowed.

The VA loan program also allows sellers to contribute money toward the home buyer’s closing costs and other fees. This gives you, the buyer, more flexibility when it comes to negotiations. It could also save you thousands of dollars in out-of-pocket costs.

Within the context of VA loans, a “seller concession” occurs when the person selling the property helps cover a cost that the buyer would normally pay. For example, the seller might agree to pay the buyer’s VA loan funding fee, mortgage discount points, or other costs.

In addition to these concessions, the home buyer can also ask the seller to pay some or all of their closing costs.

Granted, these things are “market dependent.” In a slower real estate market, sellers are generally more willing to contribute to the buyer’s costs. While in a hot market, they might decline such a request. (Seek your real estate agent’s advice on this subject.)

Benefit #4: VA loans offer competitive interest rates.

DFW home buyers who use VA loans to buy a house can also benefit from competitive mortgage rates. According to a study conducted by Polygon Research, borrowers who use the VA program tend to have the lowest interest rates and origination fees of all the different mortgage types. To measure this, the research firm analyzed data collected under the Home Mortgage Disclosure Act (HMDA).

To quote their November 2020 report:

“From HMDAVision® [an analysis tool] we see that VA loans in fact on average had the lowest interest rates in 2019 — both for all VA loans, and for the home purchase subset.”

It’s also worth noting that mortgage rates are currently hovering at historically low levels, regardless of mortgage type. On December 17, Freddie Mac reported that the average rate for a 30-year fixed home loan had fallen to 2.67%. That was the lowest average in more than 50 years, to date.

Mortgage loan interest rates can vary from one borrower to the next, for a number of reasons. But it’s good to know that our deserving military members and veterans often qualify for some of the lowest rates available.

Benefit #5: You don’t need perfect credit to qualify.

VA mortgage loans are partially guaranteed by the federal government. That’s what makes this program unique, when compared to conventional or “regular” home loans. As a result of this government backing, the program offers flexible qualification criteria for borrowers.

In conclusion, you don’t need perfect credit to qualify for a VA loan in the Dallas area. The most important thing is that you have steady and stable income, enough to cover your monthly payments and other recurring debts. Share these 5 VA Loan Benefits for DFW Area Home Buyers to your fellow veterans!

VA Loan Eligibility Requirements

You may be eligible for a VA Home Loan if you meet one or more of the following conditions:

To be eligible for a VA Loan, veterans, active duty service members, National Guard members and reservists must meet the basic service requirements set forth by the Department of Veterans Affairs. Spouses of military members who died while on active duty or as a result of a service-connected disability may also be eligible.

It’s ultimately up to the VA to determine eligibility for the home loan program, but prospective borrowers can get a good idea by looking at the VA’s basic eligibility guidelines.

  • You have more than 6 years of service in the National Guard or Reserves,
  • You are the spouse of a service member who has died in the line of duty or as a result of a service-related disability.
  • You have served 90 consecutive days of active service during wartime,
  • You have served 181 days of active service during peacetime,

Common Questions

Simply put, a VA Home loan allows qualified buyers the opportunity to purchase a home with no down payment. Also, there are no monthly mortgage insurance premiums to pay, limitations on buyer’s closing costs, and an appraisal that informs the buyer of the property value. For most loans on new houses, construction is inspected at appropriate stages and a one year warranty is required from the builder. VA also performs personal loan servicing and offers financial counseling to help veterans having temporary financial difficulties.
You can have previously-used entitlement “restored” one time only in order to purchase another home with a VA loan if the borrower has paid off the prior loan but still owns the property, and wants to use his entitlement to purchase a second home. This often occurs with active duty borrowers who PCS to a new station but want to keep their existing home for retirement. However, if the prior loan has been paid off and the property is no longer owned, they can have their entitlement restored as many times as they want. They can re-use their VA eligibility for every home purchase from the first to the last. Also, veterans who have used a VA loan before may still have remaining entitlement (see chart) to use for another VA loan. A veteran’s maximum entitlement is $89,912, and lenders will generally loan up to four times your available entitlement without a down payment, provided your income and credit qualifications are fine, and the property appraises for the asking price. Lenders may require that a combination of the guaranty entitlement and any cash down payment must equal at least 25 percent of the reasonable value or sales price of the property, whichever is less.
You are not eligible for VA financing solely based upon Active Duty for Training in the Reserves or National Guard. Note: Guard and Reservists are eligible if they were “activated” under the authority of title 10 U.S. Code as was the case for the Iraq/Afghanistan.
Although there is no maximum VA loan (limited only by the reasonable value or the purchase price), lenders generally limit the maximum VA loan to $417,000.
Everyone is required to obtain a Certificate of Eligibility. If you do not have this Certificate, you will need to apply using VA Form 26-1880 and this will require a copy of DD-214 (Certificate of Release or Discharge from Active Duty) showing character of service. Along with the Certificate of Eligibility, loan applicants will need to document their credit, savings and employment information.
No. Home loan entitlement is generally good until used if a person is on active duty. Once discharged or released from active duty before using an entitlement, a new determination of their eligibility must be made based on the length of service and the type of discharge received.
Eligibility extends to members who have completed a total of 6 years in the Selected Reserves or National Guard (member of an active unit, attended required weekend drills and 2-week active duty for training) and received an honorable discharge; continue to serve in the Selected Reserves. Individuals who completed less than 6 years may be eligible if discharged for a service-connected disability. In addition, reservists and National Guard members who were activated on or after August 2, 1990, served at least 90 days and were discharged honorably are eligible.

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