VA Loan Eligibility
Establish Your VA Loan Benefits Eligibility
Recently released from the service and ready to set down roots? In the service and looking for an alternative to on-base housing? If so, learn what you need to establish your VA benefits eligibility and apply for a VA loan. You could find yourself able to qualify for a no money down, low interest rate loan backed by the government that offers many attractive benefits. The VA loan program has flexible uses and allows:
- One Veteran to use it buy a home for his or her primary residence
- Several Veterans to pull their eligibility
- An eligible husband and wife to acquire property jointly
- A Veteran and a non-Veteran who is also not a spouse to apply for a loan together
What You Need To Prove VA Home Loan Eligibility
To qualify for a VA home loan, you must be a current servicemember, Veteran, National Guard member or reservist, or the surviving spouse of a Veteran. Active duty personnel must have served for 90 continuous days, while Veterans must show 90 or more days of active duty during wartime or 181 days during peacetime. National Guard personnel must have served in the Gulf War for 90 days or more or have an honorable discharge. For military spouses, the requirements include that you not be remarried and that your late spouse died on active duty or died from service related injuries.
If you do not meet any of these guidelines, it’s possible that you may still be eligible if you were discharged because of:
- The convenience of the government
- (RIF) Reduction-in-force
- Certain medical conditions
- Service-related disability
Your Capital Bank, N.A. specialist will be able to review your circumstances to determine your VA home loan eligibility.
Additional Documents Needed
When you apply for a VA loan, you will need some documentation. To start, you will need your Certificate of Eligibility (COE), which you can obtain directly from the VA using Form 26- 1880 – Request For A COE For Home Loan Benefits. If necessary, a Capital Bank, N.A. specialist can help you obtain that form.
In addition to your COE, you must also provide the same documents you would for any home loan:
- Your driver’s license with the current address
- Social Security number
- Current pay stubs
- Tax returns and W-2s for the past two years
- Current employment information
- Bank account statements
- Information on creditors and on the loans you currently have
What VA Benefits Eligibility Means
Qualifying Veterans are granted an entitlement that tells a lender how much the government would be willing to back. Eligible candidates start out with $36,000 of entitlement for a mortgage of $144,000 – 25% of the loan amount. Veterans must qualify for their loan values based on credit and income like any other loan, but a highly qualified applicant could be granted a mortgage of up to $424,100 or more in some counties with an entitlement of $104,250. This includes the basic $36,000 in entitlement, plus up to $68,250 for larger loans.
To obtain a loan, the Veteran’s income and credit history are scrutinized as with any loan. If he or she were prequalified for only $200,000, that would mean that the total entitlement was $50,000, with $36,000 coming from the basic entitlement and the balance coming from the extended entitlement. This entitlement does not translate to cash in the hand, but a Veteran could use this benefit again and again to buy homes once previous loans were paid off.
Exclusive Benefits To Veterans
VA loans are reserved exclusively for Veterans, as a benefit for their time bravely serving our country. With a VA loan, Veterans have the advantage of a mortgage that comes with very favorable terms:
- No money down. This is especially convenient for current servicemembers or Veterans with stable incomes but little or no savings.
- No (or very low) closing costs. Although there are costs involved in transferring property from one person to the other, the Veteran usually does not have to pay them. Usually, either the seller or the VA assumes the costs.
- No private mortgage insurance (PMI). Ordinarily, those who put less than 20% down would have to protect the lender through additional insurance.
- Low interest rates, based on prevailing market rates.
Most Veterans must pay a VA funding fee which amounts to 2.5% for first-time users and 3.3% on second time users. Some Veterans, namely those receiving compensation for service related disabilities, those eligible to receive disability if they were not already receiving retirement pay, and surviving spouses of Veterans who died in the service or have service related disabilities are exempt from the fee. The VA makes the judgment call as to who is exempt.
If you have checked your VA home loan eligibility, start the prequalification process right now by applying for a VA loan online. If at any time you have question, call us at (866) 216-3577. Capital Bank, N.A. will guide you through the application process so that you can get prequalification, just as you would if you were applying for a conventional loan.
Working With Veterans
If you meet all the requirements, qualifying to obtain a VA loan should be easy. However, it always helps to have an empathetic lender on your side. At Capital Bank, N.A., we want to help you receive the benefits you are entitled to. Even if you have bankruptcies or other credit problems from the past, we will work with you to help you establish your VA home loan eligibility.
Once you have established VA home loan eligibility, with the help of a lender such as Capital Bank, N.A., the lending organization works directly with the government to complete processing the loan. Though the requirements appear straightforward, there are many loan situations that can benefit from the support of a lender experienced in VA loans.
VA loans have been available to secure the dreams of Veterans since 1944 and have helped more than 20 million Veterans become homeowners. In 1970 and 1978, the terms of the loans changed, so that more people who served during specific periods of active duty were eligible. Since 1992, the loans were made available to anyone who served, including Reservists and National Guard personnel. On October 26, 2012, the surviving spouse of an Iraq War Veteran received the 20 millionth loan.
At Capital Bank, N.A., we are anxious to add your loan to the list of Veterans living the American Dream. Just apply online today using our simple form, or contact one of our specialists at (866) 216-3577 to establish your VA home loan eligibility.