What Kind of Dwelling Can I Buy Using a VA Loan?
What are VA Loans?
VA loans typically refer to home loans given to qualified veterans. The Department of Veteran Affairs guarantees these kinds of loans.
Why get a VA Loan?
Many benefits can be gained from attaining a VA loan. The primary benefit is that VA loans permit individuals to buy property with a low down payment, and in some cases, no down payment at all. The other benefits of a VA loan are as follows:
• Lack of pre-payment penalty fees
• Lower potential closing costs
• Removal of premiums for mortgage insurance
• Potential for interest rate negotiation
• Possibilities for home warranties if a property under construction has been VA-inspected
• Options for VA aid for temporary incapability to pay, and
• Loan assumption by buyers if an individual wants to sell his property
There are no set price limits for a home to be purchased with a VA loan. Note that lenders will typically give a maximum of four times the amount of a VA entitlement, if an individual wishes to acquire property with no down payment. However, if you are capable of setting aside an amount of money to use for a down payment, you will qualify for a larger loan amount (the increase of which is proportional to the down payment). VA loan limits vary. In Hawaii, for example, the VA limit for a loan is $625,500.
The property to be purchased must be the individual’s main residence. VA loans are not for use in buying commercial properties or other properties for investment. You are required to document that you will occupy the home if you wish to obtain a VA loan. Also, some condo units are ineligible for financing under VA loans. Check with the VA loan department if you wish to purchase a condominium with their assistance. Also, VA loans are not available for buying properties in other countries. VA loans may only be utilized to finance homes in the United States, as well as properties in US territories.
Can Unmarried Borrowers Get a VA Mortgage?
Let us first examine the benefits of getting a Veterans Administration (VA) mortgage loan before answering the question. The main advantage of a VA mortgage loan is that it is guaranteed so that the borrower need not pay private mortgage insurance or PMI to get a home loan without a required down payment. In most cases, a veteran may be able to borrower up to 100 percent of the selling price of the property as long as it does not exceed $417,000.
It should be noted that the VA does not act as the lender but only guarantees the loans for a veteran. Also, the VA may only provide a guaranty to a veteran or military person subject to certain requirements such as a good credit score. Being a veteran does not automatically ensure eligibility for the VA guaranty. It is important to consult a credit counselor or financial planner in determining eligibility and in preparing the required documents.
An easy way to obtain proof of eligibility for a VA mortgage loan is through the online service known as Automated Certificate of Eligibility or ACE. However, some people may not be able to use this because the ACE database does not have sufficient information on them. For those who are able to use ACE, they can mail their VA Form 22-1880 and a photocopy of their DD-214 discharge documents to the appropriate regional Eligibility Center.
The reason for the question on whether unmarried borrowers can get a VA mortgage is that a co-signer may be required for a VA mortgage loan. Normally, the spouse of a veteran or military member is acceptable as co-signer for the loan. However, two unmarried veterans or military members may still be able to co-sign for a VA loan. A non-military co-signer may also be permitted but the VA guaranty is only extended to the veteran’s portion in the property. It should also be noted that some lenders are not amenable to this kind of arrangement. Therefore, it may require a bit more research to find the lender who would be willing to accept this kind of mixed loan.
Can I Have Two VA Mortgage Loans at the Same Time?
The VA mortgage loan became available in 1944 to offer housing to veterans and their families. To be qualified for a VA loan, a veteran must have rendered active duty and should not have been given a dishonorable discharge. In most cases, no down payment will be needed because the Veterans Administration guarantees up to 25 percent of the mortgage loan.
However, it should be noted that the VA only acts as guarantor and is not the lender. Usually, a private lender or mortgage company will provide the loan and the veteran will also have to qualify through good credit history and debt-income ratios.
Before we look at the possibility of having two VA mortgage loans at the same time, let us examine the requirements for getting a VA mortgage loan. First of all, the applicant must be a qualified veteran who has sufficient home loan entitlement. Secondly, the loan must be used to buy a home. Also, the applicant must plan to reside in the property after closing the loan. Fourth, the applicant must have good credit history. Lastly, He must have sufficient income to make the mortgage payments, cover the expenses often needed to maintain home, and the remaining income should be sufficient for the family’s living expenses.
With regards to having two VA loans at the same time, an applicant would be able to get a second VA mortgage loan if his home loan entitlement is still sufficient to cover the new home. He should also be able to prove that the new home would be more suitable to his requirements. However, it should be noted that VA loans cannot be utilized to buy properties for investments. What should be considered is the remaining amount in the entitlement. However, a veteran may utilize a Streamline VA Refinance for an investment property. This would be the case for the veteran who has two VA loans at the same time. He has moved out of the older property that he had formerly taken as his home and transferred to the new property. Meanwhile, he is renting out the older home.
What is a VA loan?
The term VA is short for the “Department of Veterans Affairs.” Through the GI Bill of Rights this type of loan came into affect in 1944.
In order to qualify for this type of mortgage you must be either active in the service, a veteran, reservist, part of the Public Health Service, or even the spouse of a veteran who is no longer with us (as long as the borrower is not remarried). This home loan may only be borrowed for the veterans primary residence.
This type of loan is specialized to assist American veterans with easy financing. But not all veterans are interested in this type of loan program.
Through a VA mortgage, the maximum amount a veteran can borrow with zero down payment is $417,000. Read more
How Do VA Home Loans Work?
A VA home loan is provided to US military veterans and is guaranteed by the Department of Veterans Affairs. These loans are also available for the widows or widowers who have not remarried and the spouses of the veterans and active military personnel.
However, partners who are not married to the veterans cannot benefit from this type of loan unless they are also veterans or active military personnel. The primary advantage is that the borrower does not have to pay private mortgage insurance (PMI) and down payment.
The primary purpose of the VA home loan is to offer home financing to veterans and active-duty military personnel in areas where there is insufficient or no private financing service. These areas are usually rural areas and small towns or cities are far from the big cities. Read more
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