A Simple Guide to VA Loans & FHA Loans!

Let us help you take advantage of all the extraordinary benefits the Veterans Affairs (VA) Mortgage program offers all qualifying military service members, veterans, and surviving spouses of former service members.

With all of our military service members in mind, we have created a central website filled with information on how to apply for a VA Home Loan, the benefits to qualifying for a Veteran Mortgages, the numerous options available for Veteran Loan Refinancing, information on the Veteran Relocation Assistance Program (RAP), and information all First Time Veteran Home Buyers should know.

As part of our mission to become your leading expert in VA home loan benefits, a leading expert in VA Home Loan financing is available to you.

Browse our comprehensive VA Home Loan website. Fill out any form you find on any page of our website. As soon as you submit your form to us, know you have taken the first big step towards owning your very own home. Now that you have taken that first big step, we will help you navigate through the VA Home Loan program. A leading VA Home Loan expert in will contact you to answer any questions you may have about this federal program created to benefit you and your family.

Our VA finance officers can answer any questions you may have about the advantages to securing a VA guaranteed loan, whether the piece of real estate or house can be purchased with a VA backed loan, or even whether refinancing with a VA home loan will reduce your monthly mortgage payment significantly. All of our VA Mortgage Specialists are also available to discuss how to qualify for a VA home loan, refinancing, and many other money-saving home loan tips offered by the VA.

Haven’t heard about the VA Loan Loan program?

VA Loan and VA Loan Refinance are financial loans backed by the United States government.

In 1944, the US government created the military loan guaranty program for service members in the pursuit of the American dream – homeownership. The US Department of Veteran Affairs assists potential Veteran Home buyers and First Time Veteran Home buyers eliminate the red tape normally associated with home buying. Since the creation of the military loan guaranty program, over 80% of all pre-qualified veterans were approved for a VA backed home loan. Many surviving spouses of former service members are also eligible to take advantage of all the benefits a VA guaranteed home loan has to offer.

Now more than ever, this lifeline extended to service members is nothing short of spectacular. After the collapse of the housing market, mortgage companies tightened their money belts and raised the credit and income standards all borrowers must meet before mortgaging a home. In a buyer’s market, more stringent standards set by lending companies is frustrating and can definitely slow progress toward your goal of realizing the American dream – homeownership.

Houses sold today are selling at an all-time low. We are still in a buyer’s market.

As military personnel or veteran or surviving spouse of a veteran, benefit from the lifeline your federal government created for you and your family. Your government created lifeline entitles you to benefit from relaxed qualification guidelines and extended benefits established for use during the home loan application process.

Enjoy lower monthly mortgage payments every month. Reduce or eliminate out-of-pocket costs related to home ownership.

Move into your home knowing your home loan purchase is supported by a government backed loan. Enjoy peace of mind that out of all home loan borrowers in the US, veterans who mortgage their personal home through the VA Home Loan Program are the least likely to lose their home due to foreclosure in the future.

VA Home Loan specialists will guide you through the VA home loan application process. Anytime you have a question or major decision to make before purchasing your home, we will be here to help. Buying a home shouldn’t overwhelm you. Unfortunately, in today’s market, in addition to tighter lending requirements, mortgage companies have created more hoops for borrowers to jump through before any borrower can realize the American dream of homeownership.

Our network of dedicated Veteran Home Loan approved lenders will eliminate the red tape, determine your VA loan benefit qualifications, reduce the amount of leg work you must do to enjoy your VA home loan benefits and expedite your move into a home while keeping more money in your pocket every month.

VA Home Loan Experts

Feel secure you are choosing the most qualified VA Loan experts. Maximize your financial benefits.

Although the lifeline extended by the US government is a federal program, the government is not actually in the business of providing home loans to veterans. Instead, private lenders such as banks, savings & loans, or mortgage companies finance your VA home loan. The Department of Veteran Affairs role is as guaranty of VA loans, protecting private lenders from total loss resulting from the default of a home loan. The protection by the government against total loss is just enough incentive for private lenders to offer veterans great terms on all VA home loans.

In order to take advantage of all the benefits a government backed home loan offers, you must choose the right lender. Not all local lenders offer VA loans. Choose a VA approved lending institution to handle your home loan. A VA approved home loan lender must pass stringent requirements before receiving approval by the Department of Veteran Affairs is granted. Your US government wants to make sure you and your family are taken care of by a competent and knowledgeable VA Home Loan entity. Feel confident during every step of the home buying process and beyond that you have a VA Home Loan expert on your side.

As a VA approved lender we have experience with the VA loan application process.  We also ensure we are knowledgeable in all current VA legislation in consideration on the floor of the United States Congress. As leading industry experts, we make sure our information to help you successfully apply for a VA Mortgage is the most current information available.

One of our in-house VA loan officers will help you navigate through the loan process quickly, easily, and successfully. Let us eliminate the red tape typically encountered during the home loan application process. We want you, our military hero, to take advantage of all the benefits you are entitled to.

A VA loan officer will guide you through every step, answer all the questions you may have during your loan process, and assist you in gathering all the necessary paperwork needed to expedite your move into your new home.

We only rest when you move into your new home secured by a VA guaranteed mortgage. And even after you and your family are moved into your new home, if you ever need us in the future, we will be here to assist you.

Our VA Home Loan specialists are also experts in VA Home Loan Refinance, VA Home Loan Relocation, and VA Home Loan PCS Transfers.

Qualified service members have the opportunity to purchase a home with $0 down payment. Additionally, VA Home Loan benefits include lower interest rates, a lower monthly mortgage payment, no private mortgage insurance to pay, buyer’s closing costs are limited, and an appraisal can be done to inform the buyer of the property value.

Best of all, you may qualify with a lower debt to income ratio and lower credit score. During this time in our economic recession, we can all use a little help to realize our dreams of homeownership while saving money on monthly mortgage payments.

Eligibility to Apply for a VA Home Loan

I served in the US military. How do I apply for a VA-backed loan?

As long as you are a veteran, active duty personnel, Reservist/National Guard member, or unmarried surviving spouse of a veteran who died in service or as a result of service, you may request a Certificate of Eligibility (COE). Your eligibility for the Certificate is determined after a review is conducted on the character of your military service and your reason for your separation from the military.

As Veteran Loan specialists, every day we help veterans obtain their Certificate of Eligibility (COE). The COE is a document unique to VA loans. Unless you previously applied for a VA Home Loan, more than likely you have neither requested a COE, nor read through the information found on a COE. We are VA Home Loan application specialists with experience requesting and issuing Certificates by mail and online, right in our very own office.

As VA approved lenders we have registered access to special tools and resources, such as certain components and applications accessed through the VA Information Portal (VIP). Any and all of our in-house VA loan specialists are available to reduce your wait time for a determination of your eligibility. VA loan officers will enter your information into the VA Information Portal, determine your eligibility, and issue you an online COE in a fraction of time

Necessary Information to Determine Eligibility for Certificate
– Full Name- Social Security Number- Military Branch you served in or are serving in- Reason for your separation from service or service number

– Loan numbers of all VA loans you

By helping you gather and submit the necessary information eligibility determination, we save you from any stress. But most of all, we save you time. Often times, without the help of a VA Home Loan expert, applicants for a Certificate of Eligibility are turned away once, twice, multiple times because documents are incomplete or incorrect forms are submitted. If we submit your information, and we are unable to issue a certificate because of insufficient information or entitlement must be restored, our state-of-the-art VA Information Portal automatically acknowledges any additional information you may need to submit to remedy the issue. Rather than possibly spending hours or days submitting paperwork and waiting for approval, our in-house VA Home Loan Officer can apply for you in minutes and have a determination within minutes, sometimes even seconds. We will gladly work with you and help you fill out any forms you may need so you may be issued a Certificate of Eligibility.

After receiving your Certificate of Eligibility, you are allowed to apply for a VA-guaranteed home loan. It is important to note that eligibility for a Certificate does not guarantee your VA loan application will be approved.

Most Common Categories Qualifying for a COE

The most common categories of service members who normally qualify for a Certificate of Eligibility are:

1. Service during Wartime-

WWII: 9/16/1940 – 7/25/1947

Korean: 6/27/1950 – 1/31/1955

Vietnam: 8/5/1964 – 5/7/1975

During wartime, you must have served on active duty for at least 90 days before discharge. A discharge under dishonorable conditions may disqualify you from eligibility for a Certificate.

If you were discharged for a service connected disability, you may still qualify even if you served less than 90 days.

2. Service during Peacetime:

7/26/1947 – 6/26/1950

2/1/1955 – 8/4/1964

5/8/1975 – 9/7/1980 (Enlisted)

5/8/1975 – 10/16/1981 (Officer)

During peacetime, you must have served at least 181 days on active duty. A discharge under dishonorable conditions may disqualify you from eligibility for a Certificate.

If you were discharged for a service connected disability, you may be eligible even if you served less than 181 days.

3. If you enlisted and served after 9/7/1980, or served as an officer after 10/16/1981, you must have:

– served for at least 24 months of continuous active duty or completed the full period for which you were ordered or called to active duty. A full completed period must have been 181 days or longer, or

– completed at least 181 days of active duty and been discharged under the specific authority of 10 USC 1173 (Hardship), or 10 USC 1171 (Early Out), or have been determined to have a compensable service-connected disability, or

– been discharged with less than 181 days of service for a service-connected disability.

Individuals may also be eligible if they were released from active duty due to an involuntary reduction in force, certain medical conditions, or, in some instances for the convenience of the Government.

4. Service during the Gulf War:

8/2/1990 to date yet to be determined

If you served on active duty during the Gulf War, you must have:

– completed 24 months of continuous active duty or the full period (at least 90 days) for which you were called or ordered to active duty, and been discharged under conditions other than dishonorable, or

– completed at least 90 days of active duty and been discharged under the specific authority of 10 USC 1173 (Hardship), or 10 USC 1173 (Early Out), or have been determined to have a compensable service-connected disability, or

– been discharged with less than 90 days of service for a service-connected disability.  Individuals may also be eligible if they were released from active duty due to an involuntary reduction in force, certain medical conditions, or, in some instances, for the convenience of the Government.

5. Active Duty Service Personnel

If you are currently on regular active duty (not active duty for training), you are eligible after having served 181 days (90 days during the Gulf War). However, you may be denied a Certificate if you were discharged or separated from a previous qualifying period of active duty service.

6. Selected Reserves or National Guard

If you are not otherwise eligible, but you 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), you may be eligible if you:

– were honorably discharged, or

– were placed on the retired list, or

– were transferred to the Standby Reserve or an element of the Ready Reserve other than the Selected Reserve after service characterized as honorable service, or

– continue to serve in the Selected Reserves.

If you completed less than 6 years and were discharged for a service-connected disability, you too may be eligible for a Certificate.

7. As a surviving spouse of a veteran or serviceperson, you may also be eligible if you:

– are not remarried and your veteran spouse died while in service or from a service connected disability, or

– your spouse is a serviceperson missing in action or a prisoner of war.

Eligibility for a Certificate may also be established for:

– Certain United States citizens who served in the armed forces of a government allied with the United States in WW II.

– Individuals with service as members in certain organizations, such as Public Health Service officers, cadets at the United States Military, Air Force, or Coast Guard Academy, midshipmen at the United States Naval Academy, officers of National Oceanic & Atmospheric Administration, merchant seaman with WW II service, and others.

What do I have to show to prove I qualify for a Certificate of Eligibility? The evidence the US Department of Veteran Affairs requires depends on the nature of your eligibility. Find

If you are. . .

You should submit . . .

Veteran(Includes a member or former member of the National Guard or Reserves who was once activated for Federal Service) DD Form 214 – We must have a copy showing the character of service  and the narrative reason for separation.
Active Duty Servicemember a current statement of service signed by (or by the direction of) the adjutant, personnel office, or commander of the unit or higher headquarters. Your current statement of service must include -Your full nameSocial Security NumberDate of birth

Entry date on active duty

The duration of any lost time

The name of the command providing the information

If you are. . .

You should submit . . .        

currently serving in the Selected Reserve or the National Guard and have never been activated for federal service a statement of service signed by (or by the direction of) the adjutant, personnel officer or commander of your unit or higher headquarters. Your statement of service must include -Your full nameSocial Security NumberDate of birth

Entry date on duty

The total number of creditable years of service

The duration of any lost time

The name of the command providing the information

a discharged member of the National Guard who has never been activated for federal service one of the following -NGB Form 22, Report of Separation and Record of Service, for each period of National Guard service, ORNGB Form 23, Retirement Points Accounting, and proof of the character of service
a discharged member of the Selected Reserve who has never been activated for federal service a copy of your latest annual retirement points statement and evidence of honorable service

If you are. . .

You should submit . . .    

the surviving spouse of a servicemember who died on active duty If you’re already receiving Dependency and Indemnity Compensation (DIC), you do not need to provide any additional documents.If you don’t receive DIC, you should provide two documents -1. A copy of the DD Form 1300 (Report of Casualty) from the military, and2. A copy of your marriage certificate.

Note:  If you qualify for the home loan benefit, you probably qualify for monthly payments under DIC. Provide a simple signed statement stating you would like to apply for DIC.

Place the servicemember’s Social Security number is on all documents.

the surviving spouse of a veteran who died as a result of military service If you’re already receiving Dependency and Indemnity Compensation (DIC), you should provide a copy of your award letter. Generally, you will already have a record on file at a VA regional benefits office.If you don’t receive Dependency and Indemnity Compensation (DIC), you should provide three documents -1. A copy of the veteran’s DD Form 2142. A copy of the veteran’s death certificate

3. A copy of your marriage certificate

Note: If you qualify for a home loan benefit, you probably qualify for monthly payments under DIC. Provide a simple signed statement stating you would like to apply for DIC.

Place the servicemember’s Social Security number on all documents.

Credit Qualifications

What makes a VA guaranteed home loan even more attractive to potential home buyers, including first time home buyers is your opportunity to take advantage of this VA benefit does not rest solely on your credit score. We, as a VA-approved lender, cannot blindly determine your willingness to repay a future debt obligation. This is why we look to your past repayment practices to determine your willingness to fulfill your future obligation to repay a VA Loan. So, no matter what your credit score, your approval for a VA Home Loan is determined after a look into your credit history over the prior 12 months. VA loan officers will look beyond the past 12 months to determine your willingness to repay a future home loan when a credit report includes any bankruptcies, tax liens or debt obligations that were placed in collections.

Lack of Credit

In some cases, our potential borrowers don’t necessarily have bad credit, but don’t have a credit history for us to determine the likelihood we will be re-payed if we choose to finance their VA Loan. Fortunately, we may choose to review other items to determine your future ability to repay a debt obligation. We have reviewed the amount a potential borrower has available in checking accounts, proof of a steady paycheck, proof rent payments have been timely paid, and proof utility payments have been made on time and fully paid.

Look at this list of items your VA home loan lender may consider when determining your willingness and ability to repay a VA-guaranteed home loan.

Past Fulfillment of Debt Obligations Ability to Fulfill Future Debt Obligations Future Equity that may be realized if property is sold
Credit DelinquenciesRepossessionsAccounts in CollectionsCharge-Offs

Foreclosures, bankruptcies, liens, judgments

Mortgage delinquencies

Alimony and Child Support Payments

Borrower’s request for numerous new lines of credit in the last 12 months

Revolving Credit Accounts: type, age, limits, usage, and status

Excellent Credit HistoryLiquid Assets/Cash on handMinimal amount of consumer debtConservative Use of Consumer credit

Self-Employed or Salaried Employee

Rental Income on existing property

Purpose of Loan: purchase or refinance (cash-out or not)

Loan Characteristics: fixed rate, balloon, or a.r.m. (adjustable rate mortgage)

Loan Term: 15, 20, or 30 year fixed rate, balloon, or a.r.m.

Debt Ratios

Property Use: primary residence, second home, or investment propertyProperty type: 1 unit vs. 2/4 unit detached property, condominium vs. manufactured home

Credit guidelines are determined by the Department of Veteran Affairs, however, the credit requirements will vary from lender to lender. Call us today to evaluate your credit qualifications. In addition to an evaluation, as a VA Mortgage Lender with experience and knowledge of the VA home loan process and eligibility, we can also help you understand any negative factors in your credit history and why it may be affecting your approval.

Positive Indicators of Creditworthiness

(these factors cannot be used to offset unsatisfactory credit)

Excellent Credit History

Conservative use of open consumer credit

Minimal Consumer Debt

Long-term Employment

Significant Liquid Assets

Sizeable Down Payment

Existing Equity in Refinancing Loans

Little or No Increase in Shelter Expense

High Residual Income

Low Debt-to-Income Ratio

Tax Credits for Child Care

Tax Benefits of Home Ownership

Calculations Used to Determine Loan Worthiness (either one of two methods is used)

The Department of Veteran Affairs provides a guide for determining an acceptable minimum amount of residual income. Your residual income will then be considered in conjunction with a look into hose you have handled similar housing expenses. Remember, we are VA lenders, we do not have the ability to see into the future. We must perform thorough reviews and calculations to determine the likelihood you will fulfill your contractual obligation to repay a home loan backed by the VA.

If your residual income is below the minimum amount suggested by the VA, a calculation to determine your debt-to-income ratio may be conducted. This ratio is not usually used as the sole reason for rejecting your home loan application, but considered in conjunction with a review of all other credit factors.

Method One (Residual Income Calculation) Method Two (Debt-to-Income Ratio*)
Add together total debts, obligations, and monthly shelter expenses.-  This includes routine housing expenses, taxes, and additional monthly debt such as car and credit cards.Subtract sum from above from your gross total income to get your total net income.The number you calculated above is residual income you have available to cover family living expenses such as food, health care, clothing, and gasoline. Add together total monthly debts and obligations.- This includes housing, car, credit, and other monthly debt obligations.Divide the sum from above by your gross monthly income.- This includes all salary and earnings, other compensation or net income.

The number you calculated above is your debt-to-income ratio. Your approval may be determined by the percentage compared against the VA guideleines.

*VA’s debt-to-income ratio is a guide, and when making a determination for underwriting, it is second to residual income.

Advantages of a VA Home Loan

Why is a VA Home Loan a good choice for me?

Realize the American dream of homeownership while saving money. The advantages of financing your new home through the VA Home Loan Program include:

$0 down payment is required

LOWER Interest Rates

NO Private Mortgage Insurance is required

LOWER Monthly Mortgage Payments

Payment of closing costs by either party is negotiable.

Relaxed lending standards

Qualified service members have the opportunity to purchase a home with $0 down payment. Additionally, VA Home Loan benefits include lower interest rates, a lower monthly mortgage payment, no private mortgage insurance to pay, buyer’s closing costs can be limited, and an appraisal can be done to inform the buyer of the property value. Best of all, lenders for VA guaranteed loans relax their lending standards for our military service members and veterans.

Lower Monthly Payments

This all sounds too good to be true. Exactly how can VA loan lower my monthly payments?

As we mentioned before, if you finance under the VA Home Loan Program created specifically for active service members, veterans, and qualifying surviving spouses, you can take advantage of lower interest rates and the elimination of the PMI requirement. Both a lower interest rate and no requirement to pay a sum to a private mortgage insurance company GUARANTEES your monthly payments will be as low as possible – maybe as low as they have ever been in 20 years.

1.  VA interest rates are traditionally about 1% lower than any other home loans available in the mortgage world. Now listen this:  Interest rates on home loans are at an ALL TIME LOW right now. This can only mean financing your new home through the VA offers you the opportunity to lock in the lowest interest rates available to anybody, anywhere in the US.

2.  Private Mortgage Insurance (PMI) is not required on a VA loan. Save hundreds of dollars per month in private mortgage insurance you don’t have to purchase and pay monthly . For a conventional loan, you must purchase private mortgage insurance up to the amount you financed.

No Down Payment

Why can I purchase with $0 down if I choose a VA-backed loan?

A VA Home Loan is the only type of loan available that allows you to move into your new home with no down payment. This means you can finance up to 100% of your new home’s value.

In the mortgage industry, lending institutions for conventional loans require a down payment of between 10 and 20% before a borrower may move into their new home. A down payment is required to ensure the lending institution can recover a large portion of the balance due on a loan if a borrower defaults on their home loan. The bigger the down payment (or amount of protection you can afford the lender against loss due to a default), the better the financing terms your lending institution may offer you since your lender is protected against severe loss if you fail to repay the loan.

No requirement you pay a down payment before move in means you can finance 100% of your new home’s value. When you finance 100% of your dream home’s value, you don’t have to worry about coming up with a percentage of your home’s value before you move in to your new home. You can simply enjoy the money you saved choosing to finance your home with a loan guaranteed by the federal government. Of course, you can also place the money you saved into a savings account, pay moving expenses, or make a payment towards the principle amount of your loan. Reducing the principle amount on your loan as soon as you can, creates more opportunity for you to increase the equity in your home at an accelerated rate.

So, to break it down for you, the purchase of a home with a VA mortgage can save you as much as 20 percent in upfront costs. This means you can move into your new house with more money in your wallet, A LOT more money in your wallet. Look at the estimated savings based on the down payments required with conventional loans:

Conventional

Loan Amount

5% Down

10% Down

20% Down

$150,000

$7,500

$15,000

$30,000

$250,000

$12,500

$25,000

$50,000

$350,000

$17,500

$35,000

$70,000

$450,000

$22,500

$45,000

$90,000

VA Funding Fee

What is the VA Funding Requirement and do I have to pay it?

By law, a funding fee must be paid on all guaranteed loans to the Department of VA. All eligible VA borrowers are charged a funding fee for the opportunity to benefit from 100% financing and no monthly private mortgage insurance (PMI) payments. The amount of money you put down for a down payment or the amount of money you must put down for a down payment, will affect the total amount of your VA funding fee. Since the amount of your VA funding fee is proportional to the amount the VA has guaranteed the lender against loss, any decrease in the amount you must finance will also decrease the amount you must pay the VA for their guarantee.

The amount of the funding fee will be reduced if you offer or are required to leave a down payment.

Ordinarily, your funding fee will be financed into your total loan amount. If not, you must pay the entire funding fee within 15 days of closing on your home.

How does the VA determine the funding fee amount I must pay?

The basis of which determined your entitlement, will also determine the amount of your VA Funding Fee.

If your entitlement is based on active duty, you are required to pay::

– 2.15% on your first VA loan

– 3.30% on all future home loans or refinancing

If your entitlement is based on service in the Guard/Reserve, you are required to pay:

– 2.40% on your first VA loan

– 3.30% on all future home loans or refinancing

VA Assumptions and Interest Rate Reduction Refinance Loans, require all borrowers to pay a 0.5% funding fee, currently. The 0.5% funding stays constant. Regardless of the number of times you have benefited from a VA Assumption loan or Interest Rate Reduction Refinance loan, you are currently only required to pay 0.5%.

VA Refinance Options

Now is the best time to Refinance with a VA Loan. Interest rates are at an all time low. You may be eligible to lower your monthly interest rate. A lower monthly interest rate means you keep more money in your wallet every month.

When you combine the cost-saving benefits of a lower interest rate with the expertise and guidance provided by our VA Refinance Loan consultants, you are closer to experiencing financial freedom from paying excessive and unnecessary interest rates. Lower your interest rate and take advantage of the amount you save each month on interest. Use the money you save to pay down the principle on your VA Refinance Mortgage. You can be closer to achieving financial independence than you ever thought you could be while basking in the American dream of owning a home.

Why should I apply for a VA streamline refinance? It’s too convenient not to apply – most eligible Veterans qualify and you will save money on your monthly mortgage payments.

Interest rates are at an all time low. This means a VA Home Loan Refinance can help keep more money in your pocket for your other expenses. No matter whether your current mortgage is backed by the VA Home Loan program or your current mortgage is a conventional loan, refinance with a VA loan and reduce the amount of your monthly home mortgage payment. In most cases when refinancing, you will not incur any out of pocket costs, and you will not be required to get your home appraised again.

Interest Rate Reduction Refinancing Loans (IRRRL)

Lock in your rate now to receive these VA streamline/IRRR benefits:

  1. No out-of-pocket costs. Any closing costs and funding fees are rolled into the new loan.
  2. Lower your interest rate without using additional entitlement.
  3. No appraisal of your home is required.
  4. No income verification is required to qualify.
  5. No credit check.
  6. No more than a 0.5% funding fee to lower your interest rate.
  7. Easily transition from an ARM to a fixed rate mortgage before your interest rate increases at the time your ARM expires.

The VA created the Federally insured A loan guaranty program, also referred to as the Interest Rate Reduction Refinancing Loan (IRRRL) Program and a VA Streamline Refinance Loan, for eligible veterans and active duty members to take advantage of lower mortgage interest rates. Refinancing allows you to lock in a lower interest rate available today on your VA financed home mortgage. If you currently hold a VA-guaranteed loan, you are eligible to refinance up to 100% of your existing VA value of the property.

The general rule for all loan proceeds from a VA IRRRL may only be applied to paying off the primary existing VA Home Loan, and the costs of obtaining or closing on your VA IRRRL. A borrower cannot receive any cash from the VA IRRRL. However, as with many rules, there is one exception. Cash proceeds available at closing of a VA IRRRL may be used to reimburse you for the money you spend on making your home more energy efficient.

Qualified energy saving home improvements will result in cost savings over time allowing you to save money by lowering the amount of your monthly electricity bill AND lowering your monthly mortgage payments. All qualifying energy efficient improvements must be completed within 90 days (3 months) immediately preceding the date you close on your VA IRRRL. In addition, your reimbursement total is limited to the first $6,000 you spent on energy efficient improvements.

VA approved home loan specialists are ready to discuss this option for you. You may be eligible to start saving and don’t even know it yet. Lets move towards keeping more money in your hand immediately.

VA Debt Consolidation

Can I refinance to take advantage of the equity in my home?

Also available to you is VA debt consolidation. If you have built enough equity in your home, you may be eligible to refinance into a new VA home loan. Refinancing your current home with a larger VA mortgage will allow you to take advantage of available funds in your home currently masquerading as non-monetized equity. This VA Home Loan Refinance program is for current Veterans and Active Military Personnel who have already financed their current home, but need help fulfilling their home mortgage obligation.

Turning equity in your home into US currency, means you can take care of other expenses, including other debt payments you are struggling to pay. The VA Debt Consolidation program will quickly consolidate your eligible obligations so you can make one easy and manageable payment. Eligible obligations include credit card debt, 2nd mortgages, lines of credit, and car loans.

The VA’s Debt Consolidation option also gives you the opportunity to keep more money in your hand every month by lowering your your monthly payments. Keeping more money available for you and your family to spend as needed is just one more benefit the VA provides to our military heroes. VA Mortgage Refinance experts are here to help you decide just which option is best for you.

VA Cash-Out Refinance

I have a monthly mortgage and need cash now to pay off other debt. Can I refinance with a VA loan to free up some cash?

Yes! You are eligible to refinance if you did not exhaust your VA Loan Eligibility when you obtained your VA loan. This special opportunity is also available to Veterans wanting to refinance their existing conventional home mortgages into a VA loan.

In Texas, Veterans can apply for the cash-out refinance program to free up to 80% of your current home’s value minus your current VA home loan amount to pay off debt, make home improvements, or to simply keep more cash in your wallet each month. Although the interest rate on a VA Home Equity Loan may be slightly higher than a traditional refinance loan, you will receive cash to pay towards other debts. A common refinance does not allow a borrower to receive any cash at closing.

Congress created this special opportunity for you. Refinance with a VA loan. Keep more money in your pocket with a Cash Out Refinance from the VA. We can discuss the Cash Out Refinance option with you and determine whether this is the best refinance option for you and your family right now.

Texas Home Equity Law

Home equity lending in Texas is a relatively new option available to homeowners. The Texas Legislature and Texas voters have enacted a number of consumer protection laws to protect Texas homeowners against predatory lenders. Some of these laws unique to home equity loans in Texas include:

– Texas law requires that if you currently have a home equity loan, you may only refinance with another home equity loan. This requirement is not negotiable. Even if you don’t want to take any more cash out on your home, you are required to refinance with a home equity loan if you currently have one on your existing home.

– A provision placed in the Texas Constitution by Texas voters requires a homebuyer to wait at least a year to refinance a home equity loan. All home equity loans can not be refinanced more than once a year.

– After applying for a home equity loan, you must wait 12-days from the time your application was taken and you were given a copy of Texas Consumer Protection laws to close on your home equity loan. A 12 day waiting period ensures you have carefully thought out your decision to mortgage your home for the benefit of cash to pay for other obligations. Just like any other home loan, foreclosure and the inability to pay your mortgage is a real threat to you and your families future home ownership.

Purchase a Condo

You CAN buy a condo with a VA Loan!

Can I apply my VA loan benefits to purchase a condominium instead of a home?

Yes! You can use your VA loan benefits to purchase a condominium as long as the property meets certain pre-determined criteria. Contact your trusted VA-approved lender to help you understand whether the prospective property you want to buy meets the criteria established by the VA. Your VA home loan specialist will verify whether your potential condominium is pre-qualified in the US Department of Veteran Affairs. If the condo you are interested in is not in the VA’s database of pre-qualified properties, we will work with you to determine whether your potential future condo meets criteria. Even if not on the pre-qualified list, you may still be able to purchase this condo with a VA home loan.

What criteria qualifies a condo for a VA loan?

  1. Fifty percent or more of the property’s units must be owner-occupied.
  2. No more than 15 percent of owners can be behind on Homeowners Association (HOA) fees.
  3. If condo property is new, 75 percent of the units must be sold prior to you applying your VA home loan benefits.

Although meeting the extra eligibility requirements for purchasing a condo may take a bit more leg work before you can apply your VA loan benefits, the VA established criteria your prospective property must meet will help ensure your purchase of a condo will be in a complex that is economically viable today and for years to come. The Department of Veteran Affairs wants to make sure you will be able to sale or transfer your property to a future buyer when you decide to move.

How do I use my VA loan benefits to purchase a condo?

Contact your VA-approved lender for more information. We are a government approved VA home loan lender, here to discuss any concerns you may have. Have a question? We are here to answer those too. Fill out our form and you have made the first step towards being the owner of a condo. Lets discuss your future right now and how bright your future will be living in a condo of your very own.

VA Relocation Assistance Program (RAP)

VA RAP – Another example for how the Department of Veteran Affairs is looking out for our hero veterans by offering benefits that keep more money in veteran wallets when it’s most important.

No one wants to lose a home purchased with any loan, whether the loan is a VA government backed loan, FHA loan, or conventional loan. Unfortunately, we can’t always control our future, no matter how hard we plan. Some circumstances are unavoidable like the heavy toll the recession has taken on homeowners, personal financial issues we all go through at some point in our lives, unexpected job loss, or a myriad of other problems that can catch us by surprise. We understand how difficult the possibility of losing your home may be.

Home Retention Options

If you purchased your home with a VA guaranteed loan and struggle to make your monthly VA mortgage payments, we want to explore all reasonable home retention options available to you and your family. During this time of financial difficult and uncertainty, veteran borrowers are eligible for various forms of relief to rectify a deficient loan. Such relief includes repayment plans, forbearance agreements, and loan modifications. As VA approved Relocation Assistance Program (RAP) specialists, we value you, your family, and all the hard work you have gone through before deciding on the home of your dreams. Make your first move now. Call us to discuss all of your options before they expire.

Foreclosure Alternatives

In some instances, where it is not feasible for a veteran home loan borrower to retain their home, the VA encourages VA service providers assist veteran borrower occupants participate in various alternatives to possible foreclosure to mitigate loss caused by defaulting on a VA home loan.

Positive alternatives to foreclosure encouraged by the VA are short sales and deed-in-lieu of foreclosures (DIL). As stated by the Veteran Benefits Administration, “these options generally provide a substantially better outcome than a foreclosure sale for the borrowers, investors, and communities.” A foreclosure has negative, long lasting effects on a borrower’s credit rating. Additionally, a VA borrower who loses a home to foreclosure, must wait a specified period of time before trying to buy a home again.

RAP Funds Available

“Beginning in 2010, as part of the President’s Making Homes Affordable program, the Treasury Department announced the Home Affordable Foreclosure Alternatives (HAFA) program that provides an incentive to a borrower relocating as a result of a short sale or deed-in-lieu (DIL) of foreclosure.” After a VA home loan borrower exhausts all possible home retention solutions, VA service providers are authorized to offer a relocation assistance sum of $1,500 to encourage VA borrower occupants mitigate loss from a delinquent loan by participating in a short sale with a VA compromise claim or by execution of a deed-in-lieu of, rather than experience the difficult foreclosure process.

In fact, not only does the Department of Veteran Affairs encourage VA service providers assist veteran borrowers facing foreclosure to mitigate loss, the mortgage service industry as a whole encourages VA service providers assist veteran borrowers during their difficult time by offering special monetary incentives to participating VA service providers offering relocation assistance funds.

Veteran borrower occupants do not receive relocation assistance funds from the sale of their home. This means you receive all the money from the sale of your home minus other necessary expenses and fees normally deducted by law. Fortunately, the VA Administration reimburses all VA mortgage service providers for the cash payments given to eligible VA borrower occupants as part of the US Department of Veteran Affair’s relocation assistance program.

Any VA borrower occupant eligible for relocation assistance funds can use the money they receive to cover moving expenses, costs of lodging if you must move before the sale, gas for those unexpected trips we must make while moving, or for any other expenses incurred during this difficult time. It’s nice to know the VA is here for our heroes. Call us, qualified VA RAP specialists so we can get you your funds as soon as are eligible to receive them.

PCS Transfer

Relocating and establishing roots in a new community is a stressful time in every person’s life. Research has shown that moving is one of the most stressful events a person will experience in their lifetime. This stress can be exacerbated when faced with selling a home before the home loan is paid in full.

Good news!  Your VA loan may be assumed by a future buyer if certain requirements are met.

In certain cases, active duty military members facing permanent change of station moves before their current VA home loan is paid in full, or veterans seeking to sell their home and buy a new one before the VA mortgage is paid off can offer the buyer the opportunity to assume the VA loan.

Assumable VA loans aren’t restricted to veterans. Any buyer can assume a VA loan. Many home buyers will gladly assume a VA loan because the closing costs to transfer the mortgage are very low and the buyer doesn’t have to put any money down on an assumption. A straight purchase can require a huge down payment of 20%.

As a VA service provider we may be able to help you get out from under your mortgage without any costs. We will facilitate the process so all costs are paid by the buyer assuming the loan.

Whether the nature of the current transfer to assume the mortgage is between divorcing spouses, or whether the current home owner purchased the home before or after March 1st, 1988, determines the requirements before a VA loan may be assumed.

–  If the home was purchased with a VA loan after March 1, 1988, the VA loan may be assumed ONLY IF prior approval is granted by the bank. Once approval is confirmed and the buyer assumes the VA loan, the veteran is no longer liable for any losses the VA incurs. Buyer is now liable to the VA.

–  If the home was purchased with a VA loan before March 1, 1988, the VA loan may be freely assumed by the buyer – no prior approval needed from the bank or the VA. Veteran is liable  for any losses the VA incurs, if any, as a result of the loan assumption.

–  If the veteran home owner is getting a divorce, the VA permits an unrestricted transfer from one departing spouse to the other spouse assuming the mortgage. All unrestricted transfer VA loan assumptions must be pre-qualified by the VA. This unrestricted transfer is intended when the military spouse and non-military partner are co-borrowers. Both the departing party and party assuming the mortgage should sign a release of liability to insure the departing co-borrower is not held liable for the loan.

Do not proceed with a VA loan assumption before approval by the bank, if required by the VA. The VA warns that VA mortgage holders who attempt to proceed with a VA loan assumption without bank approval could be notified that their VA loan is “due on sale”. The VA may require your VA loan be “due on sale”, even if all payments have been paid on time and are current.

An important note to point out is that your certificate stays with the loan until paid off, unless the buyer assuming your VA loan is also a veteran. This is important to every active military member or veteran seeking to purchase a another home, because depending on the nature of your loan assumption deal, you may have to show proof you were are released from liability for the original loan, or you may have to wait until the original VA loan is paid in full.

As a VA PCS transfer specialists, our loan officers are here for you at every step through the VA loan assumption process. We have the experience you need on your side.

FHA LOANS

Am I eligible to apply for any other type of loan, if I am not eligible to apply for a VA Home Loan or my VA Loan application is not approved?

Yes! The Federal Housing Administration (FHA) conducts several loan programs to promote home ownership, similar to the Department of Veteran Affair’s home loan programs. And, just like the VA, the FHA guarantees or more accurately insures home loans against default. In other words, the FHA guarantees FHA approved private lenders will not have to write off a loan if a borrower defaults; the FHA pays in case of default. This guarantee by the FHA encourages private lenders to offer mortgage loans. The amount of your mortgage loan will often be limited to the cost of homes in the region.

Advantages of a FHA Loan

Anyone can apply for a FHA guaranteed mortgage loan. In addition, there are no income limits determining your eligibility to apply for a FHA home loan. Even if you are a first time homebuyer, you will not have to meet a certain income standard, unlike most first time homebuyer programs.

The advantages of financing your new home through the FHA Home Loan Program include:

– No income limits

– Down payments as small as 3% and receive up to 6% on closing costs

– Interest rate may be lower (in some markets)

– Easier to use gifts for down payment and closing costs

– No prepayment penalty (a big plus for subprime borrowers)

– FHA loans are assumable

– Possible leniency during financial hard times

To qualify for a FHA loan, you will need a reasonable debt-to-income ratio and a decent (not perfect) credit score.

FHA Fees

Will I have to pay additional fees to enjoy the benefits of an FHA loan?

The FHA insures a private lender will be compensated in the event you default on your FHA guaranteed home loan. In order to fulfill this obligation, the FHA charges every borrower a fee. Charged fees consist of:

– Mortgage Insurance Premium (MIP) of 1.5% required up front

– Monthly Mortgage Insurance Premiums

The mortgage insurance premiums collected by the FHA are then used to pay off the mortgage if a borrower defaults on an FHA loan.

Home Improvement Loans

Can I apply for assistance to receive funds to purchase a home in need of repair or modernization?

Yes. As part of the Department of Housing and Urban Development (HUD), the Federal Housing Administration (FHA) offers|operates|administers many single family mortgage insurance programs, including one program to facilitate the rehabilitation and/or repair of your single family property. The FHA Section 203(k) mortgage insurance program is primarily for borrowers seeking to purchase a home in need of rehabilitation and/or repair. If you qualify, Section 203(k) gives you the opportunity to enter into only one mortgage loan for the financing of both the cost of your new home and all necessary rehabilitation. Normally, when purchasing a home needing work, you must enter into multiple financing agreements with higher interest rates to purchase and rehabilitate before seeking financing for a permanent mortgage to include both previous loans.

Thanks to HUD, FHA mortgage lenders just like us, can confidently offer financing to fund your eligible home improvement and/or rehabilitation construction. HUD does not offer any direct financing; HUD does insure every FHA-approved lender financing a 203(k) Home Improvement Loan against loss upon default by the borrower. This means that if we finance the alteration, repair or rehabilitation of your home, and in the future you are unable to fulfill your contractual obligation to pay us back for the financing, HUD will step in to mitigate our loss by paying off the remaining amount on the contract. It is mortgage insurance programs like the FHA 203(k) for repair, alteration or rehabilitation, that allow FHA-approved lenders to extend financing options to potential borrowers just like you.

If you are looking for money to alter, repair, or rehabilitate your current home, or need a single, low interest permanent mortgage that includes the cost to buy the house and the cost of construction rehabilitation, or are seeking to refinance your existing mortgage before construction, contact us. We are a FHA-approved lender with the knowledge and experience you need to find funding to improve the condition of your one-to-four family dwelling unit.

Your preliminary chance to qualify for a FHA-insured loan for home improvement is based on whether the improvements you propose to make comply with the FHA’s broadest requirements for eligibility. You may be eligible for a FHA-insured loan to alter, repair, or improve your home, if the improvements you propose enhance the basic livability of your home, enhance the energy efficiency of your home, or if repairs to be made are due to a natural disaster. All other enhancements to increase health and safety are also eligible and encouraged.

As your FHA mortgage lender, we will review your qualifications and choose the best loan program to address your needs. Federally guaranteed loans by HUD or by the VA are not the only programs available to you. Some state and local agencies and even some non-profit organizations offer even more benefits to borrowers reinvesting in their community. In many communities, making improvements on your home is just one way to qualify for these Community Reinvestment Act (CRA) type loans.

We are committed to encouraging homeownership and committed to lending to qualified borrowers just like you and in a similar situation. Let us get to work for you.