Tag: home loan

VA Loans for Reservists and National Guard

As a Reservist or member of the National Guard, did you know that you could be eligible for a no down payment VA Loan? If you’re thinking about refinancing or buying a house, maybe you didn’t even realize the VA Loan could be an option for you. Although your role is different than that of a regular military member, you are still eligible to receive VA Loan benefits, with a few different qualifications. Here’s what you need to know.

VA Loan Requirements

The VA Loan was created to help veterans purchase homes, and the U.S. government provides a loan guaranty on it. It is a zero down-payment home loan with more flexibility and lower payments than conventional loans, which require 20% down. The VA Loan is only available to U.S. veterans and current military members — and that includes Reservists and National Guard.

VA Loan requirements for Reservists and National Guard are a bit stricter than those for regular military members. To be eligible for a VA Loan, you have to meet at least one of the following qualifications:

  • Six years in the Selective Reserve or National Guard, and you must have either been honorably discharged, retired, or transferred to the Standby Reserve or an element of the Ready Reserve
  • 90 days of active duty service during a wartime period
  • Discharged or released from active duty service for a service-related disability

VA Funding Fee

When you take out a VA Loan, you will have to pay a funding fee, which goes to the VA to help offset the cost of any loans that end up in default. If you have a service-related disability and are currently receiving disability compensation or are entitled to it, you would not have to pay the funding fee.

Related: Use our VA Loan Calculator to estimate total mortgage payments and VA guaranty fees!

The difference for Reservists and National Guard members is that the funding fee is slightly higher than it is for regular military members. If you take out a VA Loan with zero down, as a regular military member, you’d have to pay 2.15 percent for the first loan and 3.3 percent for any subsequent loans. As a Reservist or National Guard member, your funding fee would be 2.4 percent for the first loan and 3.3 percent for any subsequent loans.

If you have a 5-10 percent down payment, as a regular military member, you’d pay 1.5 percent funding fee for the first and any subsequent loan. With a 10-20 percent down payment, you’d have to pay a 1.25 percent funding fee for the first and any subsequent loan.

With a 5-10 percent down payment, as a Reservist or National Guard member, your funding fee would be 1.75 percent for the first and any subsequent loan. With a 10-20 percent down payment, your funding fee would be 1.5 percent for the first and any subsequent loan.

We, at Riverbank Finance, are grateful for our service members and would like to help you own the home of your dreams or refinance on your current home. To find out whether you are eligible for a VA Loan, contact one of our loan officers at (800) 555-2098 to schedule an appointment.

Request Information Now!

You’re recently divorced. Can you buy a home?

So, the marriage is over. Does that mean your dream of owning a home is, too? The short answer: No! You can still get a loan, as long as you keep in mind the following:

Keep Good Records

This is usually a good practice to have for any person, but especially true if you are recently divorced and are buying a home. Make sure you also keep your records updated. Keep a copy of any checks you’ve paid to show that you’ve paid your debts and bills in time. Any new addresses or changes in income also need to be recorded for when you meet with a loan officer.

Behave Yourself

The urge to “get back” at the ex is not uncommon, but very bad if you’re trying to get a loan. A new criminal conviction (for verbal threats, violence, or slashing tires) will definitely hurt your chances. A more common and petty way that spouses get revenge are things like not paying a bill at the home you no longer occupy or using the credit card in excess to hurt your ex’s credit. Typically, that hurts both of you and could also count as FRAUD. Don’t do it!

Pay Your Bills

If you are legally obligated to pay a bill, alimony, or a rental agreement, do it. If you feel the child support is too high or unfair, pay it anyway. Failing to pay those hurts your credit and makes you look like a bad investment. So, it’s always good to make sure that all bills are paid on time.

Know Your Worth

Properties or vehicles that need to be sold, spousal support, and child support can all help you get a mortgage if you benefit from them. You can count spousal and/or child support as income toward paying a mortgage. So, while you might be going from a two-income household to one, it may not be as bad as you fear. (Side note: it’s always good to inform the lender how long you expect the child support income will last.)

Be Vigilant

Even though you might behave yourself, your former spouse might not. Check your credit score to make sure they don’t make charges in your name. As much as it is in your power, be sure any payments the ex makes, per the divorce settlement, are in time.

Explore Your Options

Moving out of a shared home that you love doesn’t have to be the solution. If you and your ex agree that you can keep your current home, refinancing options are available that can separate a joint loan. Speak with one of our experienced loan officers today about this and more options for divorcees.

Request Information Now!

Can I get a co-signer for a home loan?

Things to avoid when buying a home in Michigan.

If you want to buy a house, you have to meet certain requirements in order to secure a mortgage. What if you do not meet the requirements for income and credit history? The good news is you can ask someone to cosign on your loan, even if they won’t live at your house. Here’s what you need to know about having a cosigner on your loan.

Who can be a cosigner on my loan?

Depending on what kind of loan you are applying for, you’ll have to abide by certain regulations on who can serve as a cosigner.

With a conventional or FHA loan, you may ask your spouse, a relative, or anyone who’s going to co-own the home with you to cosign the loan. The cosigner will need to sign an application and provide full financial information to your mortgage company.

Conventional Mortgage Cosigners

A cosigner on a conventional loan may be beneficial to help get your loan approved. The cosigner will have to be related or have a close familial relationship with you that can be clearly documented for underwriting.

FHA Mortgage Cosigners

A cosigner for an FHA loan may help to get your loan approved. Similar to Conventional mortgages, the cosigner must be related or have a documented close relationship. The cosigner may be a non-occupying co-borrower meaning that they do not have to occupy the property as their primary residence to qualify. FHA cosigning example: Mother or Father cosigning for this child’s first home.

VA Loan Cosigners

If you’re applying for a VA loan with a cosigner, the requirements are a little different. If you are married, the cosigner must be your spouse. If you are not married, the cosigner can be another unmarried veteran who’s eligible for the VA Loan. You can ask a civilian (such as your parent or significant other) to cosign the loan, but the guaranty will only apply to your portion. That means you will likely need a down payment on the loan.

What are the requirements for a mortgage cosigner?

Before you ask someone to cosign on your loan, make sure the person has a good credit history and adequate income. Otherwise, they’re only going to hinder the loan process for you. For example, if you did not make enough income to qualify on your own, your co-signer will need to make enough income to cover their own liabilities and also add enough income to make up the difference for you.

Cosigner Requirements:

  • Good Credit History
  • No recent bankruptcies or foreclosures
  • Good Jobs History
  • Low expenses
  • Documentation of Income
  • Relationship to you

Remember, the cosigner is just as responsible for paying the loan as you are. So if you default for any reason, they will have to make the mortgage payments.

Why won’t a cosigner help get my loan get approved?

Getting a cosigning on a mortgage allows you to qualify based off your joint income and credit history however all applicants must meet the minimum criteria for approval. Generally speaking, when an underwriter reviews your file, they will go of worst case scenario. This means that if your credit score is too low to qualify, getting a cosigner will not help you because the qualifying credit score would still be yours.

A cosigner will not be helpful if you did not qualify for financing independently due to major derogatory events such as a recent foreclosure or bankruptcy. The wait times for these major credit events is based off the most recent event date. All parties applying for financing must meet the minimum credit scores and wait periods to be eligible for financing.

How can I get a loan without a cosigner?

If you can not find someone who can (or will) be a cosigner for you, or you do not want to ask anyone else to share responsibility for your loan, the lender will require you to fix your credit history and/or increase your income before you can acquire the loan. You may still be eligible for loans with flexible credit such as low credit FHA mortgages.

To improve your credit, you may want to take out a small line of credit that you can repay to build positive credit history. You should also check your credit report to find out if there are any errors. You can correct those by contacting the creditor or going straight to the credit reporting agency.

You could also work on saving more money toward a down payment so you can borrow less on your home loan or have a larger down payment available which may help with loan approval. Another way to improve your chances of getting the loan is to pay down your debt, including your student loans to lower your current monthly expenses.

If you are not sure whether you need a cosigner, contact Riverbank Finance at (800) 555-2098 to make an appointment with one of our professional loan officers. We can help review cosigner options for all of our mortgage options.

Request Information Now!