Kentucky VA Home Loans offered by a Kentucky Veteran. I have successfully originated over 100 VA Kentucky Mortgages for fellow Kentucky Veterans and active duty personnel.$0 Down Home loans in KY. Free Credit Report and free pre-approvals. I can be reached by text or call at 502-905-3708, or kentuckyloan@gmail.com Not affiliated with VA Government Agency. NMLS #57916 Company NMLS #1738461 Former Army Tanker 19k
Showing posts with label applying for a va mortgage. Show all posts
Showing posts with label applying for a va mortgage. Show all posts
Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Kentucky VA Mortgage Loan Information
Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Kentucky VA Mortgage Loan Information: Kentucky VA Mortgage Loans What are VA Home Loans? VA Loans provide military veterans and current service members a distinct advan...
Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Kentucky VA Mortgage Qualifying Guidelines
Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Kentucky VA Mortgage Qualifying Guidelines: NMLS ID. 57916, NMLS ID. 1364 EQUAL HOUSING LENDER CALL/TEXT 502-905-3708 www.nmlsconsumeraccess.org subject to credit and income qualifyi...
- Min 580 FICO (Refer /Eligible thru DU or LP)- Refer Eligible
- 580 + Cash Out Refi's up to 100% (approved eligible)
- No DTI cap - follow AUS findings
- VA- REFER/ELIGIBLE - 50% max ratio
- No VOR unless required by DU findings (unless VA Refer)
VA Loans in Kentucky
10 facts about the Kentucky VA Home Loan program
1. No down payment, no mortgage insurance
These are perhaps the biggest advantages to a VA loan. You don’t need a down payment. None whatsoever. Most mortgage programs, such as FHA and conventional loans, require at least 3.5 percent to five percent down.That’s up to $12,500 on a $250,000 home purchase.
With a VA loan, you can buy immediately, rather than years of saving for a down payment. With a VA loan, you also avoid steep mortgage insurance fees. At 5 percent down, private mortgage insurance (PMI) costs $150 per month on a $250,000 home, according to PMI provider MGIC.
With a VA loan, this buyer could afford a home worth $30,000 more with the same monthly payment, simply be eliminating PMI. Using a VA loan saves you money upfront, and tremendously increases your buying power.
2. Use your benefit again and again
Your VA home loan benefit is not one-and-done. You can use it as many times as you want. Here’s how.
Assume you purchased a home with a VA loan. But now, you’ve outgrown the home and need something bigger. When you sell the home and pay off the VA loan completely, you can re-use your benefit to buy another home. Your entitlement is restored in full.
But that’s not the only way to re-use your benefit.
Eligible Veterans and Service persons can receive a one-time restoration when they pay off the VA loan, but keep the home. This scenario comes into play if you purchased the home long ago, and have paid off the loan. It also applies if you have refinanced the VA mortgage with a non-VA loan.
In these cases, you can keep the home, and enjoy the benefits of VA home buying one more time.
3. Your benefit never expires
Once you have earned eligibility for the VA home loan, it never goes away. Those who served 20, 30, even 50 years ago often wonder whether they can still buy a home today if they never used their benefit. If eligibility can be established, the answer is yes.
Eligibility is based on the length of time served, and the period in which you served. For instance, a U.S. Army Veteran with at least 90 days in service during the Vietnam era is likely eligible.
To check eligibility, first obtain your DD Form 214. With that document, a VA-approved lender can request your VA Certificate of Eligibility for you, or you can request it directly from VA’s eBenefits website. You may be eligible to buy a home using a VA home loan, even if you served long ago.
4. Surviving spouses may be eligible
More than 3,000 surviving spouses purchased a home with their fallen partner’s VA benefit in 2015. Un-remarried husbands and wives of Service-persons who were killed in action can buy a home with zero down payment and no mortgage insurance. Plus, the VA funding fee is waived.
There’s no way to repay the spouse of a fallen hero, but this benefit surely helps them move forward after tragedy.
5. VA Loan Rates Are Lower
According to loan software company Ellie Mae, VA loan rates are typically about 0.25% lower than those of conventional loans. The VA backs the mortgages, making them a lower risk for lenders. Those savings are passed on to Veterans.
Additionally, VA loans come with some of the lowest foreclosure rates of any loan type, further reducing risk for lenders. No surprise here, but Veterans and Service persons take home ownership seriously. These factors add up to lower rates and affordable payments for those who choose a VA loan.
6. VA loans are available from local lenders
The VA home loan is unlike most other VA benefits. This benefit is available from private companies, not the government itself. The Department of Veterans Affairs does not take applications, approve the loans, or issue funds. Private banks, credit unions, and mortgage companies do that.
The VA provides insurance to lenders. It’s officially called the VA guaranty. The VA assures the lender that it will be repaid if the Veteran can no longer make payments. In turn, lenders issue loans at superior terms. In short, a VA loan gives you the best of both worlds. You enjoy your benefit, but have the convenience and speed of working with your chosen lender.
7. Buy, refinance or tap into home equity
The VA home loan benefit is not just for buying homes. Sure, it provides unmatched home buying advantages, but you can also use it to refinance your existing mortgage, whether it’s a VA loan or not.
Homeowners with a VA loan can use the Interest Rate Reduction Refinancing Loan, or IRRRL, to easily drop their rate and payment without an appraisal, or even paystubs, W2s or bank statements. The VA streamline refinance, as it is commonly known, gives VA loan holders a faster, cheaper way to access lower refinance rates when rates fall.
Even homeowners without a VA loan can use a VA refinance. The VA cash-out loan is available to eligible Veterans who don’t have a VA loan currently. As its name suggests, a VA cash-out refinance can be used to turn your home’s equity into cash. You simply take out a bigger loan than what you currently owe. The difference is issued to you at closing.
The VA cash-out loan amount can be up to 100 percent of your home’s value in many cases. Use the proceeds for any purpose – home improvements, college tuition, or even a new car.Many homeowners today are dropping their rate and taking cash out simultaneously, accomplishing two goals at once.
But you don’t have to take out cash to use this VA loan option. You can also use it to pay off a non-VA loan. Eligible homeowners who pay mortgage insurance or are dealing with other undesirable loan characteristics should look into refinancing with a VA loan. It can eliminate PMI, get you into a stable fixed-rate loan, pay off a second mortgage, or simply reduce your rate to make homeownership more affordable.
8. Lenient guidelines for lower credit scores, bankruptcy, foreclosure
Unlike many loan programs, a lower credit score, bankruptcy or foreclosure does not disqualify you from a VA home loan.
Shop around at various lenders, because each will have its own stance on past credit issues. However, VA guidelines do not state a minimum credit score to qualify. This gives lenders leniency to approve loans with lower scores. In addition, VA considers your credit re-established when you have established two years of clean credit following a foreclosure or bankruptcy.
Many homeowners across the U.S., military and civilian, experience bankruptcies and foreclosures due to a loss of income, medical emergency or unforeseen event. Fortunately, these financial setbacks don’t permanently bar VA-eligible home buyers from ever owning again.
The exception, though, is a foreclosure involving a VA home loan. In this case, you may need to pay back the amount owed on the foreclosed VA loan to regain eligibility. But for most home buyers with past credit issues, a VA home loan could be their ticket to home ownership.
9. Funding fee waivers
VA typically charges a funding fee to defray the cost of the program and make home buying sustainable for future Veterans. The fee is between 0.50 percent and 3.3 percent of the loan amount, depending on service history and the loan type.
However, not everyone pays the VA funding fee. Disabled Veterans who are receiving compensation for a service-connected disability are exempt. Likewise, Veterans who are eligible for disability compensation, but are receiving retirement or active duty pay instead, are also exempt from the fee.
10. Buy a condo with a VA loan
You can buy many types of properties with a VA loan, including a single-family (free-standing) home, a home of up to four units, and even manufactured homes. But condominiums are commonly overlooked by VA home buyers.
Condominiums are ideal starter homes. Their price point is often lower than that of single-family homes. And, condos are often the only affordable option in many cities.
The VA maintains a list of approved condominium communities. Veterans can search by city, state, or even condominium name on VA’s condo search tool. It’s not a short list.
As a Veteran or Service-member, consider the array of home types when shopping for a home.
New Kentucky VA Loan Guidelines for 2021
New Kentucky VA Loan Guidelines for Entitlement
• As opposed to lending the money directly, the VA provides a financial guaranty on these loans
which are made by private companies. The guaranty is a type of insurance for lenders (pledging to repay a percentage of the loan if the borrower defaults) which is typically
25% of the loan.
• The guaranty is reflected in a dollar amount which is called “entitlement.” The borrower’s
amount of entitlement determines how much may be borrowed without a down payment. This calculation is determined during the origination process using a document called the Certificate of Eligibility
(COE).
• There are two layers of entitlement:
$36,000 (basic entitlement) + $91,600 (secondary entitlement) = $127,600
(maximum entitlement in most of the country)
• Since the VA guarantees 25% of the loan amount, borrowers can borrow up to 4 times their
entitlement which is now $510,400 in most of the country (1 unit).
• In high cost areas of the country, qualified Veterans can take advantage of
even more entitlement (up to $765,600 for 1 unit).
Kentucky Entitlement, VA Guaranty & VA Loan Amounts
As discussed, published county loan limits are no longer a factor for Veterans
seeking a jumbo loan with full entitlement. So, for Veterans with full entitlement, the
maximum amount of guaranty for a loan above $144,000 is 25% of the loan amount,
regardless of the county loan limit.
•
However, the county loan limits and possible down payment requirements continue to
apply for those who have more than one active VA loan, only partial entitlement
available or those who have defaulted on a previous loan.
•
If the Certificate of Eligibility (COE) shows any unrestored entitlement or the loan
amount is less than $144,000, the regular calculation will still be used to determine if
a down payment is needed, the loan amount needs to be lowered, or if the
entitlement should be restored to receive the 25% guaranty.
•
For Veterans who have previously used entitlement and such entitlement has not
been restored, the maximum amount of guaranty is the lesser of 25% of the loan
amount OR the maximum amount of guaranty entitlement available.
Kentucky VA Mortgage Loans Financing up to 100%
   Purchase, Type 1 Cash-Out Refinance, and Interest Rate Reduction Refinance Loans (IRRRL)
|
|---|
These are general credit guidelines for VA loans. They do not represent the only requirements but
do provide a general overview
Credit Report
Credit Scores
In order to verify your credit history, your lender will obtain a credit report containing
information as reported by all 3 of the major credit bureaus: Trans Union, Equifax and Experian.
Most people will have 3 credit scores but it is possible that you may have only 1 or two scores if
you have limited credit history.
This report will also include information on any public records such as bankruptcies, judgments and
tax liens.
Though VA does not have a set minimum credit score requirements, lenders will have a minimum credit score requirement.
General Credit Score Requirements
Minimum Credit Score
620
In addition to the credit scores, your actual credit history is also analyzed. Collection account
may need to be paid off in order to close your loan
It is preferable that the most recent 12 months show satisfactory payments and no other derogatory
information.
If you experienced a major derogatory credit event, there will be waiting periods that will have to
be observed before you can be eligible to qualify for a loan.
Bankruptcy Chapter 7
2 years from discharge date
Bankruptcy Chapter 13
Immediately after discharge or
After 12 months of payments**
Foreclosure*
2 years from completion date
Short Sale*
2 years from completion date
* If the foreclosure or short sale was on a VA loan, you may not have full entitlement available
for the new loan
*** Must obtain written permission from the bankruptcy court/trustee and provide proof of
satisfactory payment history
Income and Employment
Minimum History of Employment
A minimum of 2 year history in the same industry/line of work is required in most instances but
it’s not a universal rule.
Recent graduates can satisfy the two year requirement by providing proof of schooling with a degree
for the line of work you are now employed in.
Active duty members do not need a two year history as long as the minimum service requirement for
eligibility has been met.
Self employed borrowers must always have a two year history of self employment and must show a two year history of filed tax returns to meet the 24 month requirement.
Retirement, Disability, alimony and child support income does not require a 2 year history but
verification that it will continue for at least 3 years is required in order for it to be included.
Income Calculations
If you are salaried, your base income will be used to qualify you for the loan.
However, if you are an hourly employee with varied hours, more than likely, your income will be
averaged
over an extended period such as 18 or 24 months depending on the situation.
Overtime, bonuses, commission and part time employment must have a 24 history in order to be
included in the qualifying income. The income will be averaged out over 24 months. Verification of
likelihood to continue will also be required.
Non taxable income can be grossed up to account for the non-taxable status.
ASSETS
No down payment does not mean no cash needed
As mentioned in the closing cost section, there are fees that will need to be paid as part of your
home
purchase or refinance.
You must have sufficient funds to cover any closing costs or fees not paid by the
seller or lender credit.
VA does not require additional cash to cover a certain number or mortgage payments or unplanned
expenses (cash reserves), however, your ability to accumulate liquid assets and the amount of
assets currently available is taken into consideration in the overall credit worthiness analysis.
Allowable source of funds
Funds for your down payment, closing costs and other expenses can come from:
• Checking/savings accounts
• Investment accounts
• Retirement account
Gift funds from a relative are an allowed source of funds to cover down payment and or closing
costs.
The gift will need to be verified and paper trailed via bank statements and a gift letter will need
to be signed
by your and the gift donor .
Funds from unsecured loans (signature loans, credit card advances) or funds that can not be
documented are not acceptable source of funds.
Federal regulations require that all deposits into your account be documented.
In the instance of payroll deposits, nothing will need to be done if the deposit shows as a Direct
Deposit from your employer.
All other deposits will need to be explained and documented.
Debt to Income Ratios
A debt to income ratios is the percentage of your total debt obligation, including the new
estimated mortgage payment, all debts shown on your credit report, as well as alimony, child
support etc, as compared to your gross qualifying income
Deferred student loans
If student loan repayments are scheduled to begin within 12 months of the date of loan closing, the
anticipated monthly payment will be included.
If you are able to provide evidence that the loan(s) will be deferred for a period outside that
time frame, the payment will not be included.
Alimony/child support You will be expected to truthfully declare that you pay alimony or child
support. You will be asked to provide your divorce decree and/or child support order to verify the
amounts.
Documentation Checklist
The following is a general list of documentation required for a home loan application.
Not all items will apply to your situation
CREDIT / IDENTIFICATION/ ELIGIBILITY
🏭 Copy of driver’s license or other photo I.D.
🏭 Copy of divorce decree
🏭 Copy of bankruptcy papers, including all schedules and discharge, and credit
explanation letter for reason for bankruptcy.
🏭 Letter of explanation on any late payments, collections, charge off’s or derogatory
credit
🏭 Letter of explanation for all recent credit inquiries
🏭 DD214 if not active duty or Statement of service if active duty
EMPLOYMENT/INCOME
🏭 Pay stubs (LES) for the most recent 30 days available
🏭 W-2's for the previous two years
🏭 Federal tax returns for the previous two years. All pages and schedules must be
included
🏭 If self-employed, provide all pages and schedules of last two years’ business tax
returns and corporate K-1's
🏭 Award letter for Social Security benefits, disability or Pension
🏭 Proof of receipt of child support, alimony or any other non-employment source of
income
ASSETS
🏭 Provide ALL pages of most recent 2 months’ statements for all accounts; including all
checking, savings, stocks, IRA, 401k, etc. The statements must show your name, account number and
the name of the banking institution. Any non-payroll deposits will have to be explained and
documented.
🏭 If funds to close will come from a gift, complete the gift letter (will be provided to
you) and the following:
🏭 From the donor - bank statements showing the funds in the donor's account and a copy
of the check from the donor's account
🏭 From you - a copy of the deposit slip showing the gift check deposited into your
account
🏭 If funds to close are from sale of home
🏭 Estimated closing statement showing anticipated proceeds
🏭 Copy of final closing statement and deposit slip showing proceeds deposited into bank
account
PROPERTY
🏭 Select your insurance agent and provide agent's name, address, and phone number
🏭 If refinance, or if you will be retaining your current home or own other property
🏭 Current mortgage statement
🏭 Copy of insurance declaration page
🏭 If you’re currently renting, provide your Landlord’s name, phone number and address.
🏭 12 months canceled rent checks will be necessary for private landlords. If you live
with a family member, letter stating you live rent-free will be required
KENTUCKY VA MORTGAGE QUALIFYING GUIDELINES
What are VA Home Loans?
VA Loans provide military veterans and current service members a distinct advantage when it comes time to purchase or refinance a home. Today's VA Loans have the most favorable terms available for most veterans. VA Loans can be used to purchase a new home with no down payment with no mortgage insurance or refinance up to 90% of homes current equity.
What are the eligibility requirements for a VA Loan in Kentucky?
Veterans Affairs loan guidelines use two methods of income qualification in Kentucky. The residual income method is the primary method, where it is determined that the borrower has sufficient income to cover daily living costs once housing, taxes, insurance and all other liabilities like credit card and auto payments have been made. Additionally, VA loans use a debt to income ratio (DTI). Using this ratio, the veteran's total debt should not exceed 41% of the veteran's total income. Most lenders will require at least a 580 to 620 credit score for a VA Loan approval. Keep in mind, VA guidelines do not call for a credit score but most lenders institute minimum credit score overlay to protect from buybacks from VA loans if they have too many go into foreclosure
How much can I borrow?
The maximum Kentucky VA Mortgage amount is determined by:
Maximum VA Loan in Kentucky: The largest loan allowed for VA mortgages with zero down is now based on your VA loan entitlement in KY. Please refer to the Kentucky VA Loan Limit chart at the bottom of this page to see your area's limit.
Maximum Finance: For purchase transactions, the Maximum VA Loan will be 100% of the lower of the selling price or the appraised value.
What will the down payment and closing costs be?
no down payment required and closing costs vary from lender to lender and usually is based upon the loan amount, credit score, time to close (lock period) and whether or not you get a par rate or a higher rate with a lender credit to pay some of your closing costs at closing.
What property types are allowed for VA Loans in Kentucky?
VA Loans may be used to purchase or refinance single-family residences and VA approved condo projects if the property is the veteran's primary residence.
Can I do a VA refinance in Kentucky?
Three kinds of VA Refinance programs are available for veterans in Kentucky.
Rate/Term VA Refinance
The Rate/Term VA Refinance can be used to refinance a conventional, FHA or subprime mortgage into a stable, fixed rate VA Loan.
VA Cash-Out Refinance
A Cash-Out VA Refinance is very beneficial for the veteran who wants to access the equity that they have built up in their home. VA Loans can be used to refinance up to 90% of a homes current value and take cash out for any reason.
Streamline Refinance
The VA Streamline Refinance is designed to lower the interest rate on a current VA mortgage or convert a current VA adjustable rate mortgage into a fixed rate. A VA Streamline Refinance Loan can be performed quickly and easily. It requires much less hassle and paperwork than a normal refinance including no appraisal, no qualifying debt ratios and no income verification.
How much can I refinance in Kentucky?
The maximum amount for an KY VA loan is determined by:
Maximum VA Loan in Kentucky: The largest loan allowed for a VA Mortgage varies from county to county. To see what the limit is in the county in which you're interested, visit the following page
This site lists U.S. territories as well as states.
Maximum Finance: In Kentucky, The maximum VA refinance loan amount will be 100% of the appraised value of the home for a rate/term refinance or 100% of the appraised value for a VA cash out refinance.
What factors determine if I am eligible for a VA Refinance Loan?
VA refinance loans use two methods for income qualification purposes in Kentucky. The residual income method is the primary method, where it is determined that the borrower has sufficient income to cover daily living costs once housing, taxes, insurance and all other liabilities like credit card and auto payments have been made. Additionally, VA loans use a debt to income ratio (DTI). Using this ratio, the veteran's total debt should not exceed 41% of the veteran's total income. Most lenders will require at least a 620 credit score for a VA Loan approval.
Why choose a VA Home Loan?
Kentucky VA Mortgages require no down payment.
There are no prepayment penalties for VA Home Loans.
An Kentucky VA Loan is fully assumable, provided the person assuming is qualified.
VA Mortgage Loans have no PMI premiums.
A VA Mortgage Loan is eligible for non-credit qualifying, Streamline Refinance or "IRRRL".
A VA Home Mortgage is available all areas of the country, provided a market exists for the property and the home meets VA's property standards.
A VA Home Loan may be used to purchase or refinance a new or existing home.
Kentucky VA Loans are offered at terms of 15 or 30 years.
Maximum Finance: In Kentucky, The maximum VA refinance loan amount will be 100% of the appraised value of the home for a rate/term refinance or 100% of the appraised value for a VA cash out refinance.
What factors determine if I am eligible for a VA Refinance Loan?
VA refinance loans use two methods for income qualification purposes in Kentucky. The residual income method is the primary method, where it is determined that the borrower has sufficient income to cover daily living costs once housing, taxes, insurance and all other liabilities like credit card and auto payments have been made. Additionally, VA loans use a debt to income ratio (DTI). Using this ratio, the veteran's total debt should not exceed 41% of the veteran's total income. Most lenders will require at least a 620 credit score for a VA Loan approval.
Why choose a VA Home Loan?
Kentucky VA Mortgages require no down payment.
There are no prepayment penalties for VA Home Loans.
An Kentucky VA Loan is fully assumable, provided the person assuming is qualified.
VA Mortgage Loans have no PMI premiums.
A VA Mortgage Loan is eligible for non-credit qualifying, Streamline Refinance or "IRRRL".
A VA Home Mortgage is available all areas of the country, provided a market exists for the property and the home meets VA's property standards.
A VA Home Loan may be used to purchase or refinance a new or existing home.
Kentucky VA Loans are offered at terms of 15 or 30 years.
Kentucky USDA Rural Housing Mortgage Lender: 100% Financing Zero Down Payment Kentucky Mortgag...
Kentucky USDA Rural Housing Mortgage Lender: 100% Financing Zero Down Payment Kentucky Mortgag...: 100% Financing Zero Down Payment Kentucky Mortgage Home Loans for Kentucky First time Home Buyers: Kentucky First Time Home Buyer Programs ...
10 Tips for Mortgage Loan Applicants Not to After Pre-Approval for a KY Mortgage
--
Text/call: 502-905-3708
10 Tips for Mortgage Loan Applicants Not to After Pre-Approval for a KY Mortgage
1. Don’t change jobs or become self-employed.
2. Don’t buy a car, truck, van, boat or motorhome unless you plan to live in it.
3. Don’t use your credit cards or let your payments fall behind.
4. Don’t spend the money you have saved for your down payment.
5. Don’t buy furniture before you buy your house.
6. Don’t originate any new inquiries on your credit report.
7. Don’t make any LARGE or CASH deposits into your bank account.
8. Don’t change bank accounts.
9. Don’t co-sign for anyone.
10. Don’t purchase anything until after the closing.
Kentucky Mortgage Pre-Approval Checklist of Items Needed for Approval Letter
- Bank Statements - Last 2 Months – All bank statements for all accounts from the last 2 months. Include all numbered pages of all bank statements!
- Driver's License – Legible state-issued driver's license
- Evidence of Insurance – For all properties owned
- Federal Tax Returns - Last 2 Years – Last 2 years of federal tax returns to prove income, include all schedules
- HOA statement (if applicable) – Most current statement
- Loan Application (1003) – Please complete all fields
- Mortgage Statement(s) – Most recent for all properties owned
- Pay Stubs - Received in Last 30 Days – Last 30 days of pay stubs to prove income
- Social Security Card – Legible social security card to prove social security number
- W-2s - Last 2 Years – Last 2 years of W-2s to prove income
Joel Lobb
Mortgage Loan Officer
Mortgage Loan Officer
Individual NMLS ID #57916
American Mortgage Solutions, Inc.
fax: 502-327-9119
email: kentuckyloan@gmail.com
email: kentuckyloan@gmail.com
What are the Qualifications for a Kentucky VA Home Loan?
10 facts about the Kentucky VA Home Loan program
1. No down payment, no mortgage insurance
These are perhaps the biggest advantages to a VA loan. You don’t need a down payment. None whatsoever. Most mortgage programs, such as FHA and conventional loans, require at least 3.5 percent to five percent down.That’s up to $12,500 on a $250,000 home purchase.With a VA loan, you can buy immediately, rather than years of saving for a down payment. With a VA loan, you also avoid steep mortgage insurance fees. At 5 percent down, private mortgage insurance (PMI) costs $150 per month on a $250,000 home, according to PMI provider MGIC.
With a VA loan, this buyer could afford a home worth $30,000 more with the same monthly payment, simply be eliminating PMI. Using a VA loan saves you money upfront, and tremendously increases your buying power.
2. Use your benefit again and again
Your VA home loan benefit is not one-and-done. You can use it as many times as you want. Here’s how.Assume you purchased a home with a VA loan. But now, you’ve outgrown the home and need something bigger. When you sell the home and pay off the VA loan completely, you can re-use your benefit to buy another home. Your entitlement is restored in full.
But that’s not the only way to re-use your benefit.
Eligible Veterans and Service persons can receive a one-time restoration when they pay off the VA loan, but keep the home. This scenario comes into play if you purchased the home long ago, and have paid off the loan. It also applies if you have refinanced the VA mortgage with a non-VA loan.
In these cases, you can keep the home, and enjoy the benefits of VA home buying one more time.
3. Your benefit never expires
Once you have earned eligibility for the VA home loan, it never goes away. Those who served 20, 30, even 50 years ago often wonder whether they can still buy a home today if they never used their benefit. If eligibility can be established, the answer is yes.Eligibility is based on the length of time served, and the period in which you served. For instance, a U.S. Army Veteran with at least 90 days in service during the Vietnam era is likely eligible.
To check eligibility, first obtain your DD Form 214. With that document, a VA-approved lender can request your VA Certificate of Eligibility for you, or you can request it directly from VA’s eBenefits website. You may be eligible to buy a home using a VA home loan, even if you served long ago.
4. Surviving spouses may be eligible
More than 3,000 surviving spouses purchased a home with their fallen partner’s VA benefit in 2015. Un-remarried husbands and wives of Service-persons who were killed in action can buy a home with zero down payment and no mortgage insurance. Plus, the VA funding fee is waived.There’s no way to repay the spouse of a fallen hero, but this benefit surely helps them move forward after tragedy.
5. VA Loan Rates Are Lower
According to loan software company Ellie Mae, VA loan rates are typically about 0.25% lower than those of conventional loans. The VA backs the mortgages, making them a lower risk for lenders. Those savings are passed on to Veterans.Additionally, VA loans come with some of the lowest foreclosure rates of any loan type, further reducing risk for lenders. No surprise here, but Veterans and Service persons take home ownership seriously. These factors add up to lower rates and affordable payments for those who choose a VA loan.
6. VA loans are available from local lenders
The VA home loan is unlike most other VA benefits. This benefit is available from private companies, not the government itself. The Department of Veterans Affairs does not take applications, approve the loans, or issue funds. Private banks, credit unions, and mortgage companies do that.The VA provides insurance to lenders. It’s officially called the VA guaranty. The VA assures the lender that it will be repaid if the Veteran can no longer make payments. In turn, lenders issue loans at superior terms. In short, a VA loan gives you the best of both worlds. You enjoy your benefit, but have the convenience and speed of working with your chosen lender.
7. Buy, refinance or tap into home equity
The VA home loan benefit is not just for buying homes. Sure, it provides unmatched home buying advantages, but you can also use it to refinance your existing mortgage, whether it’s a VA loan or not.Homeowners with a VA loan can use the Interest Rate Reduction Refinancing Loan, or IRRRL, to easily drop their rate and payment without an appraisal, or even paystubs, W2s or bank statements. The VA streamline refinance, as it is commonly known, gives VA loan holders a faster, cheaper way to access lower refinance rates when rates fall.
Even homeowners without a VA loan can use a VA refinance. The VA cash-out loan is available to eligible Veterans who don’t have a VA loan currently. As its name suggests, a VA cash-out refinance can be used to turn your home’s equity into cash. You simply take out a bigger loan than what you currently owe. The difference is issued to you at closing.
The VA cash-out loan amount can be up to 100 percent of your home’s value in many cases. Use the proceeds for any purpose – home improvements, college tuition, or even a new car.Many homeowners today are dropping their rate and taking cash out simultaneously, accomplishing two goals at once.
But you don’t have to take out cash to use this VA loan option. You can also use it to pay off a non-VA loan. Eligible homeowners who pay mortgage insurance or are dealing with other undesirable loan characteristics should look into refinancing with a VA loan. It can eliminate PMI, get you into a stable fixed-rate loan, pay off a second mortgage, or simply reduce your rate to make homeownership more affordable.
8. Lenient guidelines for lower credit scores, bankruptcy, foreclosure
Unlike many loan programs, a lower credit score, bankruptcy or foreclosure does not disqualify you from a VA home loan.Shop around at various lenders, because each will have its own stance on past credit issues. However, VA guidelines do not state a minimum credit score to qualify. This gives lenders leniency to approve loans with lower scores. In addition, VA considers your credit re-established when you have established two years of clean credit following a foreclosure or bankruptcy.
Many homeowners across the U.S., military and civilian, experience bankruptcies and foreclosures due to a loss of income, medical emergency or unforeseen event. Fortunately, these financial setbacks don’t permanently bar VA-eligible home buyers from ever owning again.
The exception, though, is a foreclosure involving a VA home loan. In this case, you may need to pay back the amount owed on the foreclosed VA loan to regain eligibility. But for most home buyers with past credit issues, a VA home loan could be their ticket to home ownership.
9. Funding fee waivers
VA typically charges a funding fee to defray the cost of the program and make home buying sustainable for future Veterans. The fee is between 0.50 percent and 3.3 percent of the loan amount, depending on service history and the loan type.However, not everyone pays the VA funding fee. Disabled Veterans who are receiving compensation for a service-connected disability are exempt. Likewise, Veterans who are eligible for disability compensation, but are receiving retirement or active duty pay instead, are also exempt from the fee.
10. Buy a condo with a VA loan
You can buy many types of properties with a VA loan, including a single-family (free-standing) home, a home of up to four units, and even manufactured homes. But condominiums are commonly overlooked by VA home buyers.Condominiums are ideal starter homes. Their price point is often lower than that of single-family homes. And, condos are often the only affordable option in many cities.
The VA maintains a list of approved condominium communities. Veterans can search by city, state, or even condominium name on VA’s condo search tool. It’s not a short list. For example, there are more than 2,400 approved condo communities in Washington State, about 1,000 in Texas, and a staggering 9,000 in California.
As a Veteran or Service-member, consider the array of home types when shopping for a home.
Kentucky VA Loan Questions and Answers
 Kentucky VA Loan Questions and Answers | ||
Can I get a Kentucky VA loan if I have had a bankruptcy in the last few years?
Kentucky VA credit standards state that a veteran with a bankruptcy less than 3 years ago would generally not be considered a satisfactory credit risk unless: the veteran or spouse has obtained items on credit since the bankruptcy and has paid the obligations in a satisfactory manner for a continued period; and the bankruptcy was caused by circumstances beyond the control of the borrower, which would have to be verified. A bankruptcy discharged 3 to 5 years ago must be given some consideration in the underwriting of the loan. A bankruptcy discharged more than 5 years ago may be disregarded. These are the minimum standards that mortgage companies must follow when making a VA loan. In 95% of the cases, companies make the decision to approve a loan without VA's prior approval. Keep in mind that mortgage companies also have money at risk in giving you a VA loan, so they may have stricter credit standards than those mandated by VA. How large of a loan can I get? If my guaranty entitlement is $36,000, does this mean I am limited to a $36,000 loan? Kentucky VA guaranteed loans are made by private lenders, such as banks, savings & loans. or mortgage companies to eligible veterans for the purchase of a home which must be for their own personal occupancy. To get a loan, a veteran must apply to a lender. If the loan is approved, KY VA will guarantee a portion of it to the lender. This guaranty protects the lender against loss up to the amount guaranteed and allows a veteran to obtain favorable financing terms. There is no maximum KY VA loan but lenders will generally limit VA loans to $424,100. This is because lenders sell VA loans in the secondary market, which currently places a $424,100 limit on the loans. For loans up to this amount, it is usually possible for qualified veterans to obtain no down payment financing. A veteran's basic entitlement is $36,000 (or up to $89,912 for certain loans over $144,000). Lenders will generally loan up to 4 times a veteran's available entitlement without a down payment, provided the veteran is income and credit qualified and the property appraises for the asking price. Why do I have to pay a fee for a Kentucky VA home loan? Since I paid a fee for my first loan, why is there a larger fee for my second loan? The VA funding fee is required by law. The fee, currently 2.15 percent on no down payment loans, is intended to enable the veteran who obtains a VA home loan to contribute toward the cost of this benefit, and thereby reduce the cost to taxpayers. The funding fee for second time users who do not make a down payment is 3.30 percent. The idea of a higher fee for second time use is based on the fact that these veterans have already had a chance to use the benefit once, and also that prior users have had time to accumulate equity or save money towards a down payment. The effect of the funding fee on a veteran's financial situation is minimized since the fee may be financed in the loan. May a veteran join with a non veteran who is not his or her spouse in obtaining a Kentucky VA loan? Yes, but the guaranty is based only on the Kentucky veteran's portion of the loan. The guaranty cannot cover the non veteran's part of the loan. Consult mortgage companies to determine whether they would be willing to accept applications for joint loans of this type. Mortgage companies that are willing to make these types of loans will likely require a down payment to cover risk on the non guaranteed, non veteran's portion of the loan. Unlike other loans, the mortgage company must submit joint loans to VA for approval before they are made. Both incomes can be used to qualify for the loan. However, the veteran's income must be sufficient to repay at least that portion of the loan related to the veteran's interest in (portion of) the property and the non veteran's income adequate to cover the rest. How do I apply for a Kentucky VA guaranteed mortgage loan in Kentucky? You can apply for a Kentucky VA loan at any mortgage company that participates in the VA home loan program. At some point, you will need to get a Certificate of Eligibility from VA to prove to the mortgage company that you are eligible for a VA loan. How do I get a Certificate of Eligibility for a KY VA Home Loan? A copy of the form can be obtained by calling your local VA office. Send your paperwork to any VA Regional Office. You must include a copy of your certificate of release or discharge from active duty with the proper forms. If you are on active duty, you must submit a statement of service signed by, or by direction of, the adjutant, personnel officer, or commander of your unit or higher headquarters showing date of entry on your current active duty period and the duration of any time lost. I have already received one Kentucky VA loan. Can I get another one? Yes, depending on the circumstances. If you have paid off your prior VA loan and disposed of the property, you can have your entitlement restored for additional use. To obtain restoration of entitlement, you must contact your local VA office and submit the proper form, along with evidence that the property has been disposed of and the loan repaid in full. This evidence can be in the form of a payoff statement from the former mortgage company, or a copy of the HUD-1 settlement statement completed in connection with the sale of the property. The application can be presented to any VA Regional Office. A veteran can also obtain restoration of entitlement, on a one time basis, if the prior VA loan has been paid in full but the property has not been sold. I have sold the property I obtained with my prior VA loan on an assumption. Why can't I get my entitlement restored to purchase a new home? In this case your entitlement can be restored only if the assumer is also an eligible veteran who is willing to substitute his or her entitlement for that of your original entitlement. Otherwise, you cannot have entitlement restored until the assumer has paid off the VA loan. My prior VA loan was assumed, the assumer defaulted on the loan, and VA paid a claim to the mortgage company. VA said it wasn't my fault and waived the debt. Now I need a new VA loan but am told that I am not eligible. Why not? or My prior loan was foreclosed on, or I gave a Deed in Lieu of Foreclosure, or VA paid a compromise claim. I was released from liability on the loan and/or the debt was waived. Can I get another VA loan? Although your debt was waived by VA, the government has still suffered a loss on the loan. The law does not permit your entitlement to be restored until the loss has been repaid in full. Do Kentucky VA Loans Require a Minimum Credit Score?
Aside from not needing a down payment, there isn’t a minimum credit score requirement for VA loans.
However, this doesn’t mean you can get a VA loan with a 400 FICO score. Or even a 500 FICO score in most cases.
Many lenders that originate VA loans still impose their own minimum credit score, such as 620, 640, or higher. So it can be somewhat misleading to say they don’t have a minimum requirement.
The VA is happy to say approve any loan you want credit score-wise, but will penalize lenders that exhibit high default rates. As such, VA lenders will take steps to ensure credit quality is in line with industry norms.
That means you probably won’t be able to get a VA loan with a score below 620 in most cases, though there are some lenders will go into the mid-500s or sometimes 500.
However, you should still do your best to stay on top of your credit if you want the lowest mortgage rate possible, regardless of which loan program you choose and whether you can get approved with a lower score.
Sure, you might be approved, but it could cost you big over the years in significantly higher interest costs. Why not take the time to address your credit before applying for a home loan?
Benefits and Advantages of Kentucky VA Loans
VA loans come with a number of benefits and advantages that can make them a solid choice above conventional options. Let’s take a look at some common Q&A.
Do VA loans require a down payment?
No. Perhaps the biggest advantage is the lack of a down payment requirement, which was previously mentioned. You can get VA mortgages for 100% LTV.
Do VA loans require private mortgage insurance?
Finally, VA loans do not require you to pay mortgage insurance, private or otherwise, which can obviously increase the cost of the monthly mortgage payments and the overall cost of your mortgage.
However, the VA does collect a funding fee (unless you’re exempt), which insures your loan against default and protects the originating lender. So in a sense you’re still paying insurance for the loan.
The good news is it can be paid at closing or rolled into the loan amount.
Do VA loans allow co-signers?
Yes, but it depends on the situation. If the co-signer is your spouse or a veteran, there are no special requirements. But if the co-borrower is not your spouse or a member of the military, a down payment of 12.5% may be needed (this is calculated by using half of the 25% VA guaranty).
Do VA loans cover manufactured homes?
This always seems to be a popular mortgage question, regardless of loan type. The short answer is yes, you can use a VA loan to buy a manufactured home and/or lot. However, the trick is finding a lender out there willing to provide VA financing for a manufactured home.
So it’s a yes according to VA eligibility, but a maybe in terms of finding a lender willing to extend the loan. In short, it might require a bit more legwork to track down someone willing to offer the financing.
Do VA loans require an appraisal?
If purchasing a home with a VA loan, an appraisal will be required. This is for your protection too to ensure the home is worth what you’ve agreed to pay for it.
An appraisal is also required if you’re attempting to pull cash out of your home. Conversely, if you’re simply looking to reduce your mortgage rate via an IRRRL, no appraisal is required.
Do VA loans require an escrow account?
The VA does not require lenders to maintain escrow accounts, though most impose them to ensure borrowers have the necessary funds to pay hazard insurance and property taxes in a timely manner.
In other words, the VA doesn’t explicitly require escrow accounts, but the lender you ultimately work with probably will, so there’s not much way around it. Additionally, there is typically a fee to waive escrows, so it might be cheaper just to escrow.
Do VA loans require reserves?
No, VA loans do not require reserves, which is another plus. However, if the property being financed is a multi-unit property and you’re using rental income to qualify, six months PITI will be required for reserves.
Additionally, those with non-traditional or insufficient credit may be required to provide reserves.
Do VA loans have prepayment penalties?
No again. So you don’t have to worry about being penalized for paying off your loan early or refinancing it away from the VA.
In summary, if you feel you meet the eligibility requirements for a VA loan, be sure to include this loan in your mortgage search. You may find that another type of home loan is more beneficial, but you should compare all options to be absolutely certain.
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
  If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.
| ||
Subscribe to:
Posts (Atom)