VA Loans – Most Frequently Asked Questions
Can I get a loan from the VA to buy a house?
The U.S. Department of Veteran’s Affairs (VA) doesn’t make VA loans, but rather backs the VA loans that lenders make. The VA sets the aguidelines by which VA loans can be approved, and lenders make the loans.
What are the benefits of a VA loan?
VA loans allow those who have served in the U.S. military or are presently serving to buy a home with up to 100-percent financing.
Do I need to occupy the home I’m buying with a VA loan?
Yes, you must occupy a home you buy with a VA loan as your primary residence. VA loans aren’t available to purchase second homes or investment properties.
Can I pay off a VA loan early?
Yes, you can pay off a VA loan early without incurring any extra fees because there is no prepayment penalty on a VA loan. You can pay it off in full, or you can pay it down more aggressively than the normal monthly payments require along the way.
Can I get a VA loan for a condo, or just a single family home?
Yes, you can get a VA loan for a condo, but the VA must approve the condo project.
Who is eligible for a VA loan?
Those eligible for VA loans include:
– Active duty service members
– Current or former National Guard or Reserve members who have been activated Federal active service
– Current National Guard or Reserve members who have never been federal active service
– Discharged members of the National Guard who have never been activated for federal active service
– Discharged members of the Selected Reserve who have never been activated for federal active service
– Surviving spouses in Receipt of Dependency and Indemnity Compensation (DIC) benefits
– Surviving spouses who aren’t receiving DIC benefits
Is there a minimum service threshold to be eligible for a VA loan?
To be eligible for VA loans, your service requirements are as follows:
– Served 181 days during peacetime (Active duty)
– Served 90 days during war time (Active duty)
– Served 6 years in Reserves or National Guard
– Spouse of service member who died in the line of duty or because of a service-connected disability
How do I prove military service to get a VA loan?
To get a VA loan, you need a Certificate of Eligibility (COE). You can get this through a lender, online, or by mail. The type of COE you need depends on your type of service: veteran, active duty service member, current or former National Guard, etc.
Can my lender get my COE for me?
Yes, your lender can obtain your COE for you. The VA requires all VA-approved lenders to include a COE in their loan underwriting process, so the fastest way to get your COE is through a VA lender. They can usually obtain it for you within minutes through a lender-only portal provided to lenders by the VA.
What is the max VA loan amount?
The national VA limit is $417,000, but there are certain exceptions to this for high-cost areas, where you can get VA loans as high as $1 million depending on your financial profile. When you apply for a VA loan, your lender can brief you on the options you qualify for in your specific area.
Can I use a co-signer?
Co-signers — also called co-borrowers because they’re equally liable for the loan — are allowed but only if the co-borrower is a spouse or another veteran.
Does my credit score affect my VA Loan rate?
Yes, credit scores affect your VA loan rate and your ability to qualify. Each lender will vary in terms of the credit score they require, but generally a score of 620 or better is required for you to qualify for a VA loan.
There is a direct correlation between rate and credit score: the higher the credit score, the lower the rate. Your lender can quote you based on your credit score.
Can I get a VA loan if I’ve had a bankruptcy?
The VA allows certain borrowers who meet post-bankruptcy guidelines to get a loan two years after a bankruptcy. But the VA doesn’t actually make the VA loans, the VA-approved lenders do.
Can I get a VA loan if I’ve had one before?
Yes, a VA loan isn’t a one-time benefit, so you can get a VA loan even if you’ve had one for a previous home in the past. But you can only use a VA loan to buy a primary residence, so you can’t use VA loans to acquire multiple properties.
After active duty, how is my qualifying income calculated?
The VA says your total monthly housing cost plus all other monthly payments (car loans, student loans, etc.) cannot exceed 41 percent of your income. There are select exceptions to this rule, which you can discuss with your lender.
What fees should I expect to pay for my VA Loan?
The fees for a VA loan are much like fees for any other mortgage loan. There are lender fees like origination, discount, underwriting, processing, and credit report. And there are settlement fees like title insurance, escrow fee, and document preparation. Additionally there is a VA funding fee that’s specific to VA loans. This list isn’t all-inclusive.