VA Loans & VA Refinancing
VA Loans for Purchasing and Refinancing Homes
Capital Bank is a national lender with expertise in veteran mortgage – so you feel like you are speaking to your local expert.
If you’ve come here looking for answers to your VA loans question, you’ve come to the right place! At Capital Bank, N.A., not only are we experts on VA loans, but we’re pretty proud to be working with U.S. service members too. We understand the sacrifices you’ve made to serve our country. Now it’s our turn to serve you by helping you secure one of the best mortgage loan programs out there through our nationwide network of lenders – VA loans.
Through Capital Bank, N.A.’s experience with VA and FHA loans, we’ve put together important guides and reference material for basically every State and most of the top-populated Veteran cities in the United States. This site will never ask you for any confidential information. You will only provide this information to the lender at Capital Bank that will work with you directly. We simply ask for some general information to make sure we can contact you to get your application started.
How VA Loans Work
VA loans work just like any other kind of home loan. VA loans are available for fixed rates, usually at 15 or 30-year terms. The best VA loans have rates below the prevailing fixed interest rate for mortgages; but it’s important to understand that not everyone will qualify for the best rate. The rate you receive will be dependent on your income, credit and employment history, among other factors. Your Capital Bank, N.A. loan specialist will help you understand these factors.
The major difference between VA loans and traditional mortgage loans is VA loans are available to current and ex-members of the U.S. military ONLY and they are guaranteed by the federal government. This guarantee helps protect lenders from borrowers who may default on the loan and is a prime reason VA loans are so affordable.
In addition to low interest rates, with the government backing VA loans, you:
- don’t need to pay costly Private Mortgage Insurance (PMI) every month as is required with many other mortgages,
- don’t have to provide a down payment on the loan,
- enjoy a higher debt-to-income ratio limit of 41% compared to just 36% for non-VA loans,
- can still qualify even if you’ve declared bankruptcy, and
- can pay off VA loans early without incurring pre-payment penalties.
VA loans are available only through qualified lenders. Not every lender offers VA loans, only those approved by the federal government. For those that are, like Capital Bank, N.A., you’ll need to go through the pre-approval and application process, which you can start online today. Once you’ve been pre-qualified you’ll have a budget number to work with and can start house-hunting!
Getting Pre-Qualified For VA Loans At Capital Bank, N.A.
Getting pre-qualified for VA loans is the first step towards owning your own home. The first thing to do is check your eligibility. In general if you’re a Veteran, on active duty or are the surviving spouse of a servicemember and you have not yet remarried, you qualify for the VA loans program.
To get pre-qualified our lenders will need a few items from you including:
- Social Security Number
- Amount of Loan Sought
- Assets (savings, down payment)
The Five Steps To Home Ownership With A VA Mortgage Loan
When you are ready to buy a home, there are five steps you need to complete.
- Apply for a Certificate of Eligibility
- Obtain prequalification from an approved VA lender
- Find a home and complete a purchase agreement.
- Order an appraisal from the VA
- Close on your loan and move-in
Let’s Look At Each Step Of The VA Mortgage Loan Process
- Determine Eligibility: Before anything else, you must first obtain your Certificate of Eligibility from the VA. Known as a COE, this form is used in conjunction with the form DD-214 to show the details of your service and discharge. You can apply online, which is easy, but it takes six weeks or so to get a reply. Capital Bank, N.A. can obtain this document for you in minutes by accessing the VA online database.
- Obtain Preapproval From A Lender: The next step of prequalification verifies that a lender is willing to offer you a VA mortgage loan and for how much. Even a VA mortgage loan is underwritten by a bank or other private lender: the VA just guarantees up 25% of the loan. To prevent this step from becoming a roadblock, you need to have good credit. At Capital Bank, N.A., we will help you through the prequalification process. We can give you advice about how to improve your credit and how various income, debt and credit factors affect your qualification.
- Find A Home: Next, you find the home of your dreams that is affordable and within the budget the lender has set for you. When you or your Realtor® negotiate a price, you should consider potential closing costs. Although the VA has a cap on certain costs, there are others that you or the seller must assume. If you want the seller to pay all or part of these costs, you should ask as part of your offer. A seller may not agree to all your request, but you can adjust your offer price enough to cover the costs. That way, the seller technically “pays” for things that you have wrapped into your mortgage.
- VA Appraisal: Once you have found your home, you, or most likely your lender, will order an appraisal from the VA. Since the VA wants you to buy an affordable home, they will only extend VA mortgage loan terms on a home that appraises at or above the selling price. If the home comes under the selling price you can renegotiate with the seller or request an additional appraisal. Alternatively, you can agree to the higher price but you must come up with the difference between the appraisal value and the selling price out-of-pocket.
- Close And Move In: Once all the hard work is done, you sign the closing documents, pay any closing costs not handled by the seller or included in your mortgage, and move-in.
Climbing The Hard Steps
Steps one and five of this VA mortgage loan process are the easy ones, while the middle three steps can be confusing to navigate, particularly for first time homebuyers. If you don’t find the house you want at the price you can pay or if your credit score limits your budget, you may feel you are back to square one. What can you do in this case?
- Wait until the house you want or can afford hits the market. Many times your Realtor® will keep his or her eye open and let you know if something new becomes available.
- Come up with money out-of-pocket. Although your VA mortgage loan does not require a down payment, putting money down can put a home out of your price range within reach.
- Save some more money. While this can be painful news if you want to buy a home now, waiting until you have put more money aside can lower the amount of the mortgage or help you qualify for a more costly home.
- Clean up your credit report. If you have had bankruptcies or recent delinquencies, you may need to establish a year or more of good payments. Other credit problems can be solved with a few months of on-time payments. Capital Bank, N.A. can guide you in this area or may show you other loans you can qualify for with lower credit scores.
Tips To Keep In Mind When House Hunting
When you start looking for house, there are several things to keep in mind:
- First, you must buy a home that is lower than the amount you are approved for. If you want a more costly home, you will have to put up money to cover the difference.
- Second, you must keep in mind your VA entitlement. The VA grants every service member, Veteran, or other qualifying person a basic entitlement credit of $36,000. With the basic credit, you could buy a home worth up to $144,000. However, you may be eligible for extended credits of up to $68,250, which means the VA will back up to $104,250 of your loan. With this in mind, you can buy a house up to $424,100 in most areas and have the government back 25%, or $104,250, of the VA loan.
- Third, you must not exceed the loan limits. As noted above, $424,100 is common in most areas, but some areas of the country with notoriously high cost of living rates have higher limits. If you find a house that exceeds the loan limit, you must pay the difference and only finance the $424,100 or area limit. Using the full amount of the federally-mandated loan limits depends entirely on what your lender has approved you for.
- Fourth, since VA mortgages only cover the loan, you must consider the other costs of acquiring a home. Before you even get your keys, you will need to pay closing costs. Although VA mortgages often have lower closing costs, you will be responsible for some of these costs. You might be able to negotiate a contract where your seller pays the costs, or the costs are factored into the price of the home. When moving, you will also need earnest money, moving costs, utility deposits, and additional money to add or replace appliances and the furnishings to get you started.
Capital Bank, N.A. Is On Your Side
Capital Bank, N.A. wants to put the keys to your new home in your hand. We will not only help you establish your eligibility for a VA mortgage loan, but we can guide you as you apply for prequalification and through each and every step in the process. Join millions of your military brothers and sisters in homeownership with help from Capital Bank, N.A.. To discuss your situation in depth call us at (866) 216-3577 or contact us online or if you’re ready to start the process! Just contact our helpful loan specialists at (866) 216-3577 and start climbing the steps to homeownership today.