Tag: va loan eligibility

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.

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VA Loans Just Got Better

 

For eligible servicemembers, veterans, and surviving spouses, the existing VA home loan program just got better! The Department of Veterans Affairs (VA) has introduced a new policy regarding how student loan debt affects mortgage eligibility.

Related: VA Loans for Military Veterans

VA loosens Guidelines for Student Loans

The new policy makes it easier for VA eligible borrowers to obtain a purchase or refinance loan, by changing the way student loan monthly payments are calculated. Prior to this change, 1% of the total student loan debt had to be counted toward the borrower’s debt-to-income (DTI) ratio each month, regardless of actual monthly payment structure or deferment. Now, however, the payment will be calculated based on 5% of the total student loan debt, divided by 12 months. Clear as mud, right?

Lets do some math!

For example, lets say John has $65,000 in student loan debt. Formerly, his monthly student loan payment would have been $65,000 * 1% (.01) = $650. Now, his payment will be $65,000 * 5% (.05) / 12 = $271.

What if John is on an income-based repayment structure, and only pays $250 per month? The new policy also allows a statement from John’s student loan servicer to be provided, allowing the calculated payment to reflect the actual loan terms.

What if John’s student loans are in deferment? If his repayment is scheduled to begin within 12 months from the estimated closing date, we must use the 5% / 12 months rule. If not, however, the payment can be omitted altogether if written evidence can be provided that repayment will be deferred at least another 12 months from the closing date.

By changing the way student loan payments are calculated, more VA eligible borrowers will qualify, and for a larger amount. Check out our VA Mortgage Calculator to estimate your monthly payment on a desired home purchase.

What is a VA home loan?

VA home loans are originated by private lenders, banks, and mortgage companies, but the VA guarantees a portion of the loan, allowing us to offer you more favorable terms. VA purchase loans help you buy a home with a low interest rate, without requiring a down payment or private mortgage insurance (PMI). There are also special VA loan programs for Cashout and Streamline Refinances.

Who is eligible for a VA home loan?

Active servicemembers, veterans, and surviving spouses are eligible for VA home loan programs, with a valid certificate of eligibility (COE). Length of service or service commitment, duty status and character of service determine each veteran’s eligibility for specific benefits. All VA borrowers are still subject to the minimum credit score requirement of 580 and sufficient income levels to cover expected monthly obligations. For more specific information on eligibility and requirements, visit the VA benefits website.

For More Information Visit the VA Student Loan Announcement.

Get More Information

To apply for a VA Mortgage or Refinance call Riverbank Finance today at 1-800-555-2098.

Request Information Now!

TOP VA LOAN QUESTIONS FOR U.S. HOMEOWNERS

Va home loan
After serving your country you may be entitle to many benefits including the VA home for a new home purchase, refinance or even a Cash-Out Refinance.

What is a VA home loan?

According to http://www.benefits.va.gov/homeloans/, “VA helps Service members, Veterans, and eligible surviving spouses become homeowners. As part of our mission to serve you, we provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy.”

“VA Home Loans are provided by private lenders, such as banks and mortgage companies. VA guarantees a portion of the loan, enabling the lender to provide you with more favorable terms.”

If you meet the VA Home Loan requirements by serving our country, a great loan choice in Michigan is the VA loan

What are the Benefits to VA Home Loans?

Purchase Home loans allow service members to purchase a home with no down payment. The Va Loan is a 100% financing loan which means a buyer is not required to apply a portion of their own money towards the costs of purchasing a home.

What is and Interest Rate Reduction Refinance Loan(IRRRL)

The IRRRL is a refinance mortgage that allows homeowners that already have a VA loan on their home to drop the payment to current market interest rates. It is in fact a refinance loan so there are still qualifying factors that you must meet to drop your payments. The IRRRL is typically called a Streamline Refinance VA loan because the paperwork is streamlined and may not required basic things like income or a home appraisal.

  • No appraisal or credit underwriting package is required when applying for an IRRRL.
  • An IRRRL may be done with “no money out of pocket” by including all costs in the new loan or by making the new loan at an interest rate high enough to enable the lender to pay the costs.
  • When refinancing from an existing VA ARM loan to a fixed rate loan, the interest rate may increase.
  • No lender is required to give you an IRRRL, however, any VA lender of your choosing may process your application for an IRRRL.
  • Veterans are strongly urged to contact several lenders because terms may vary.
  • You may NOT receive any cash from the loan proceeds.

What are the eligibility requirements for a VA Loan?

To be eligible for a Purchase VA loan or a VA Refinance Loan you must be able to prove your income, have acceptable credit and have a Valid Certificate of Eligibility (COE). Additionally the home itself must qualify and meed basic livability guidelines for financing.

What Type of Home can I buy with a VA Loan?

A VA loan may allow you to purchase a stick built home loan, Condo or there may even be options for a VA Manufactured Home Loan.
Additional used of VA home loans are to:

  • Buy a home, a condominium unit in a VA-approved project
  • Build a home
  • Simultaneously purchase and improve a home
  • Improve a home by installing energy-related features or making energy efficient improvements
  • Buy a manufactured home and/or lot.

What are the advantage of a VA Loan?

For those eligible for a VA Loan, there may be may advantages including easier qualifications, no down payment and lower costs.  According to the VA website here are additional benefits and advantages of a VA Loan:

  • No down payment as long as the sales price doesn’t exceed the appraised value.
  • No private mortgage insurance premium requirement.
  • VA rules limit the amount you can be charged for closing costs.
  • Closing costs may be paid by the seller.
  • The lender can’t charge you a penalty fee if you pay the loan off early.
  • VA may be able to provide you some assistance if you run into difficulty making payments.

How do I apply for a VA Loan

Since the VA does not do direct financing, you would need to apply with a bank or mortgage lender that is approved to offer VA loans. Riverbank Finance LLC is proud to offer the VA loan product to their clients and offers many loan terms for Financing options. To start, call us today at 800-555-2098 or request information below:

Request Information Now!