Veterans Administration Loans (VA Loans)
If you are a veteran of the military, this is probably the loan for you. Rates are typically lower than a conforming loan and you can borrow up to 100% of the value of your home without any mortgage insurance requirements. This almost always results in a lower monthly payment and means that on a purchase transaction, no down payment is required. This is also an excellent option for taking cash out of equity or consolidating debts since you can do so up to 100% of the value of the home. The VA does require a 2.15% (of your loan amount) funding fee that is financed into the loan. If you have used a VA loan in the past, you are likely still eligible for another VA loan, however the VA will charge you 3.3% for any subsequent loans. In the event you have a disability rating with the VA, they will waive the funding fee.
The minimum credit score required to qualify is 580, however 620+ is preferred. Minimum wait periods after derogatory credit events are shorter than conforming loans (2 years from foreclosures, short sales, and bankruptcies). As with most other programs, an appraisal would be required, however VA guidelines allow for the appraisal cost to be invoiced into the transaction, avoiding out of pocket expense on refinances.
You may be eligible for a VA loan if you meet one or more of the following:
1) You have served 90+ consecutive days during wartime
2) You have served 180+ consecutive days during peacetime
3) You have 6 years or more of service in the Reserves or National Guard
4) You are the spouse of a military member that has died in the line of duty or as a result of a service connected disability
If you're not sure if you qualify or not, give us a call and we can look you up in the VA's system.