VA Home Loans have helped thousands veterans around West Palm Beach and service members achieve the dream of home ownership. This is especially true in the West Palm Beach / Palm Beach County area. One thing many borrowers don’t know is the VA Loan is not a loan made directly by the federal government or the Veteran’s Administration. It is actually a loan made by approved Florida VA mortgage lenders that is guaranteed by the federal government. After a qualified vet finds a house and makes arrangements for the loan through their lender, the property is appraised by the Veterans Administration to ensure that it is safe and a good value. If the house passes the inspection, the VA agrees to guarantee the lender against loss of principal should the buyer default.
The maximum VA Loan amount varies depending on the county. However, in 2015 the max loan without down payment is generally $417,000 in most counties in Florida. Though it can reach close to 1 million in some “high cost” locations of south Florida.
The real benefit of a VA Loan is that the borrower is not required to make a down payment and does not have to pay the private mortgage insurance that is generally required on a conventional mortgage when the down payment is less than 20%. 100% financing is real hard to find these days in West Palm Beach and no mortgage insurance on top of it makes VA a great option.
The borrower must pay a VA funding fee that amounts to 0-3.15% of the loan, depending on a verity of factors. However, veterans can get a loan for over 100% financing to include the funding fee. This fee does not include any closing costs or fees from the lender. Below is a list of things veterans will want to know before applying for a VA loan.
VA Certificate of Eligibility (COE)
First, a borrower must have a certificate of eligibility from the VA in order to obtain a loan. To receive this certificate, the borrower must file VA Form 26-1880, Request for Determination of Eligibility and Available Loan Guaranty Entitlement. Veterans with documented active duty service of at least 90 days during World War II or in later wars are eligible for the certificate. The requirements for veterans who served only during a time of peace varies by year and station, but the minimum service time ranges from 181 days to two years. Reservists and National Guard members activated after August 2, 1990 who were on active duty for at least 90 days may be eligible for a certificate. Spouses of service members who died during service or due to a disability as a result of service are also eligible under specific circumstances, as determined by the VA. Persons who received a dishonorable discharge at any time are usually not eligible for a certificate. Don’t have your COE? No need to worry, just contact us at (904) 385-3988 and we will take care of everything.
Employment Eligibility and VA Mortgages
When evaluating employment, lenders want to ensure that a homebuyer has stable, reliable employment and that it is likely to continue for the foreseeable future. This is usually displayed by having at least two years of steady job employment.
However, it is important to note that two years of steady employment isn’t exactly 100% required. VA mortgages do not have an exact length requirement for employment history, and many applicants are examined on a case by case basis. For example, consider a veteran who recently separated from the military. Underwriters will look at the current or pending job and any specialized training to determine if it is sufficient. But, be prepared, since employment histories of less than two years will draw additional scrutiny, which is because the VA likely won’t guarantee a loan if they feel a potential borrower’s income is unreliable.
VA Credit Requirements
A large benefit of the VA Home Loan is the relaxed credit requirements meant to provide military homebuyers with an accessible mortgage option. As for credit score, there is no pass or fail number, however most lenders and banks will have in house requirements that mandate a at least a 620 credit score.
Loan Pre Approval and the Application
After determining your financial eligibility and getting your Certificate of Eligibility, you are ready to begin the process of applying for a VA Loan. Except for the VA property appraisal, this process is similar to any other home buying process. It will save you time and money and headaches to read up on basics ahead of time. There are a number of approaches to the order in which you do things when looking for a house. Many real estate agents will want you to get your VA loan pre-approval before viewing any property. This means, figuring out how much you will be able to borrow and then finding a lender who will go through your credit and officially approve you for that amount. This is different from prequalifying, which just gives an estimate of what you can borrow based on what information you provide and isn’t a promise from a specific lender for the amount.
While prequalifying will give you a ballpark idea of what you can afford to pay, a preapproval will give you an actual number, which should come in handy when you are looking at houses. And because you are already approved for the loan, It makes it easier to jump on the perfect house when you find it. Aside from finding the perfect house, the real trick of the home buying process if finding a lender who fully understands the VA mortgage process. If you are a West Palm Beach area homebuyer, look no farther than Five Stars. Questions? We are available to assist you 7 days a week. For quick service please submit the “Request Contact” form at the top right side of your screen. Mobile users can find the short Request Contact Form here. Please also be sure to call ph: 800-871-2636 and visit www.FiveStarsMortgage.com for the latest mortgage info.
Current VA home owners that want to lower their interest rate or cash out equity can learn about VA refinance options here.
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