Texas VA Home Loans
Buying a house can be one of the most significant milestones in one’s life, whether it is the first, second or third home. If you are one of the lucky ones ready to purchase your first or maybe another home today and you know you are qualified for a VA home loan, here are some essential things you need to know.
VA home loans are specifically designed for US service members as well as their eligible surviving spouses. These are usually issued by private mortgage lenders but are guaranteed by the United States Veterans Affairs. Because a government agency backs it, private lenders can give their borrowers more favorable terms such as 0% down payment, no private mortgage insurance premiums and, because the Department of Veterans Affairs limits the amount lenders charge their borrowers for closing costs, the latter can get ultra-low closing costs and other out-of-pocket expenses.
VA Home Loan Benefits
The 0% down payment and other agreeable terms make the VA home loan very enticing, but eligible borrowers can use it only on eligible purposes. Other housing-related programs enable borrowers to buy, build and repair their homes at surprisingly competitive rates.
A VA loan can be used to buy a home, a townhouse or even a condominium unit in a VA-approved project. It can also be used to build a house on an existing property, or buy a house and renovate simultaneously.
Borrowers can refinance an existing VA loan if there are changes in the rate environment to get lower rates and therefore increased savings. They can also refinance a non-VA loan into a VA loan for the same purpose.
An IRRRL stands for Interest Rate Reduction Refinance Loan, commonly known as the VA Streamline Refinance Loan. A homeowner can only use a VA streamline to refinance an existing VA loan to another VA loan with a net tangible benefit. The refinancing must make sense, lowering the rate, cutting the term, or both. A Certificate of Eligibility (COE) is not required and will reuse the original entitlement used for the loan.
VA Eligibility Requirements
The beautiful thing about VA home loans is that you don’t necessarily have to be a first-time buyer. All you need to have is a satisfactory credit, proof of sufficient income and the property you are buying has to be for own personal use as a primary residence.
While the VA does not require a specific credit score for qualification, private mortgage companies do, and it’s usually around 620; this can vary between lenders. Lenders will also be looking at a borrower’s debt-to-income ratio or DTI, while the VA prefers to use the residual method.
Of the top mortgage lenders in the country today, Houston VA lenders are among those that offer the most competitive rates and terms to home buyers. If you are looking to buy a home anywhere in the Lone Star State and are eligible for a VA home loan, talk to a VA mortgage lender to get started and realize your dream of homeownership. It is worth looking at the VA loan option, and you’ll be glad you did.