Get answers to the most frequently asked questions regarding VA home mortgage loans in Texas. As Texas VA loan specialists we have compiled a list to answers of some of the more common questions we’ve received over the years.
As always should you prefer to call us and ask us directly, you are welcome to call one of our VA loan specialists anytime at 281-860-2533. Here are the most common VA loan FAQ (Frequently Asked Questions:
What are the Benefits of a VA Loan?
Simply put VA loans offer the most flexible qualifications, lowest down payments, and some of the most competitive rates available to Veterans. When comparing VA home loans in Texas with other loan options it’s easy to see why they are so popular among those who are eligible.
No Down Payment
With a VA Loan, qualified veterans can finance 100 percent of the value of their home without putting any money down on their mortgage loan.
No Private Mortgage Insurance
With conventional loans, borrowers are required to pay private monthly mortgage insurance when putting less than 20 percent down on the home loan. Because VA home loans are guaranteed by the VA, lenders convey that decreased risk advantage on to the borrowers in terms of no PMI and lower rates.
Competitive Interest Rates
Another advantage inherint to the decreased risk by lenders with VA mortgage loans is the abililty to offer more competitive interest rates. Rates on VA loans are typically 0.5 to 1 percent lower than conventional interest rates.
Unlike most mortgage programs VA home loans offer more flexibility when it comes to qualifying for a mortgage. Here at Amcap Mortgage we use a minimum credit score of 620 for VA home loans.
Who Qualifies for a VA Loan?
The Veterans Home Loan is available to military service personnel, veterans and their eligible spouse. To qualify, borrower must have suitable and acceptable credit history. They must also have sufficient income for the amount of loan and proposed monthly payment for the home you are purchasing. The home you are purchasing must be a primary residence of for your own personal occupancy. You must have a valid Certificate of Eligibility (COE) in order to be eligible for a VA home guaranteed loan program.
The spouse of a Veteran can also apply for a VA home loan if one of these conditions apply:
- A spouse of a service member that is missing in action during war or a prisoner of war;
- Surviving spouse of a certain totally disabled veteran whose disability may not have been the cause of his or her death;
- Unmarried spouse of a Veteran who died while in service or from a service connected disability;
- Surviving spouse who re-marries on or after attaining age 57 on or after December 16, 2003.
Other Eligible Beneficiaries
You can apply for eligibility if one of these conditions apply:
- Certain U.S. citizens who served in the armed forces of a government allied with the United States in World War II;
- Individuals with service as members in certain organizations such as Public Health Service officers, cadets at the United States Military, Air Force, or Coast Guard Academy, midshipmen at the United States Naval Academy, Officers of National Oceanic and Atmospheric Administration (NOOA), merchant seaman with World War II service and others.
What is a VA Loan?
A VA home loan is a mortgage loan guaranteed by the United States Department of Veterans Affairs (VA). This loan is offered and issued by qualified lenders. It is designed to offer long term financing to eligible Veterans and/or their surviving spouse.
The original intent of a VA loan is to help eligible Veterans purchase a home with no down payment (0 down). The VA home loan program also allows Veterans to get a house with no mortgage insurance as a requirement. VA charges a funding fee from 0 to 3.15% of the loan amount instead.
Credit Scores and VA Home Loans
VA Loans do not have a minimum credit score requirement per the VA, however because the VA does not actually loan money to Veterans but instead guarantee’s the loans made by VA approved lenders, the lenders themselves will have minimum credit scores requirements. Generally it is common for lenders to require a credit score of 640 or higher. Here at Amcap Mortgage Ltd., as an approved VA Lender we use a credit score of 620 for our minimum credit score requirement on VA loans.
When figuring what your credit score is you will notice three different scores being reported between the three major credit reporting agencies. Mortgage lenders use the middle score as your credit score. Don’t know your credits scores? Apply for a VA Loan with us and we’ll let you know.
How To Qualify for a VA Home Loan
Veterans who actively served in the Armed Forces after World War II and discharged under terms other than dishonorable are eligible for VA home loan benefits in Texas. Enlisted service veterans who served after 1980 and officers who served after 1981 must complete w years of service to be eligible for VA home loan. Selected Reserve and National Guard members are also eligible if they have served six (6) years of service and were honorably discharged.
You can apply for your Certificate of Eligibility (COE) by filling out a VA Form 26-1880, request a COE. You can also ask your lender, such as AMCAP Mortgage, to obtain your Certificate of Eligibility from the VA.
Does a VA home loan entitlement expire?
No. A VA loan entitlement is generally good until used while a person is on active duty. After discharged or released and prior to using the VA loan entitlement, a new determination of eligibility is made based on length of service and type of discharge.
I’m in active service stationed overseas, can I buy a home using a VA loan for my family back home?
Yes you may. As long as you and your family will occupy the property as your primary residence, your spouse is considered an “eligible spouse” under the VA home loan program.
What is an acceptable extenuating circumstances?
They are non-recurring events that are beyond the borrower’s control that result in a sudden, significant, and prolonged reduction in income or extreme increase in financial obligations. Events that’s unpredictable, temporary in nature, out of the borrower’s control, and unlikely to happen again.
After a foreclosure or short sale, how soon can I get a VA loan?
Qualified borrowers can get a VA loan 3 years (36 months) after the last foreclosure date if they already re-established their credit since, unless there is an extenuating circumstances. VA may consider unemployment, prolonged strikes, or medical bills not covered by insurance as an extenuating circumstances. Divorce is not consider an extenuating circumstances by the VA. It is classified as “with-in your control” situation.
If foreclosure was included in bankruptcy, you can get a VA home loan two (2) years from discharge date of bankruptcy.
Can I get a VA home loan for the purchase of a 2nd home if I currently do not have a VA loan on my primary residence?
If you are an eligible veteran and still have remaining entitlement or have had your entitlement restored, you can get a second property using a VA Loan. As any and all VA loans, you must occupy or intend to occupy the property as your primary residence.
Can I purchase a home using a VA loan if I already have an existing VA loan on my primary residence?
No, you may not. You can, however, you may get another VA loan if you are (a) selling your current home, or (b) being transferred to another city/state, that’s not a reasonable driving distance from your current home. You must occupy or intend to occupy the property as your primary residence.
How much is my VA Loan entitlement?
Your basic entitlement is $36,000. For loans in excess of $144,000 to purchase or construct a home, additional entitlement up to an amount equal to 25 percent of the VA county loan limit for a single family home may be available. VA county loan limits can change yearly. The loan limits are the amount a qualified veteran with full entitlement may be able to borrow without making a down payment.
What does it mean that a VA Loan is guaranteed?
The Veterans Administration guarantees the loan for the approved lender in case of default. Approved VA Lenders like Amcap Mortgage are the ones who actually loan the money.