VA loans are simply the best loan on the planet. VA loans are insured by the government just like FHA loans. VA allows low fico scores as low as 550 as well as increased debt to income ratios. We are seeing debt to income ratios on loans funded in excess of 60%. Probably the most attractive advantage to VA’s sister loan product FHA is that VA does not require mortgage insurance in addition to your monthly payment, property taxes and insurance. So in a nutshell, if an FHA buyer and a VA buyer had identical income and liabilities then the VA buyer will ALWAYS qualify for more and or have a lower monthly payment.
We also cater to veterans who have been turned down by Wells Fargo, Chase, Bank of America or their local mortgage company: all who have something called overlays that they add on top of FHA guidelines in order to protect themselves from risk. For example a borrower might be turned down for having a credit score below 620 or maybe they received a REFER/ELLIGIBLE AUD DU findings. Most lenders decline these borrowers but we have the ability to manually underwrite these loans, approve them and fund them. One of the greatest features of VA financing is the VA streamline refinance. Non cash out refinances on the streamline program do not require income, appraisal or review if the borrower’s liabilities on credit. Hence the word “streamline”. Many veterans take advantage of lower market rates just 6 months after their initial purchase VA loan is funded.
Veterans may also qualify for 100% loan to value cash out refinance with the non streamline full credit and appraisal qualifying VA loan.
VA allows zero down payment in counties where the VA loan limit is $417,000 and up to $625,500 in high cost of living counties. Let’s go over two examples. If a veteran is purchasing a home for $450,000 in a county with a $417,000 loan limit, they must first calculate the difference which is $33,000. The veteran is required to put down 25% of the difference between their counties loan limit and their purchase price which is $8,250.
If a veteran is purchasing a home in Orange County, CA which has an increased loan limit of $625,500 and their purchase price is $700,000 they must calculate the difference between the two amounts. They are required to put a down payment of 25% of the difference($74,500 x 25% = $18,625). Here is a list of increased loan limit counties that are greater than $417,000.
Another great feature of VA loans is that if a veteran purchases a 2, 3 or 4 unit property, the loan limits are increased by unit number and county. Below are the counties listed with 1 – 4 units.
Whether you are ready to purchase with your VA benefits today of would like to know how to prepare to qualify, give us a call today!