Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Kentucky VA Home Loan Requirements for Approval

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Kentucky VA Home Loan Requirements for Approval: Minimum credit score Qualifying for Veteran Home Loans The Veteran Loan program is designed for veterans who meet the minimum number...

Kentucky First Time Home Buyer Programs For Home Mortgage Loans: Louisville Kentucky Mortgage Lender for FHA, VA, ...

Kentucky First Time Home Buyer Programs For Home Mortgage Loans: Louisville Kentucky Mortgage Lender for FHA, VA, ...: Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Kentucky USDA Rural Housing Mortgage Lende...

CREDIT ALERT VERIFICATION REPORTING SYSTEM (CAIVRS) KENTUCKY GOVERNMENT LOANS USDA, FHA, VA

 

How VA home loans Work

page

For veterans, active-duty service members and some spouses, VA home loans can be a great way into homeownership. But they differ in some key ways from traditional home loans. Find out if a VA home loan is right for you, and if so, what to expect.

Transcript

Disclaimer

Close Transcript

If you’re thinking of buying a home, a VA home loan can help you make it happen.

Let’s take a look at what VA home loans are as well as some of the advantages they offer that traditional mortgages don’t.

A VA home loan is a loan that veterans, active duty service members and some surviving spouses are eligible to apply for. They often come with better terms than a traditional mortgage and can be easier to qualify for.

There are specific eligibility requirements in order to qualify, like the length of your service, which we cover in an accompanying checklist.

If you’re eligible, you can apply for a VA home loan at any time during or after your service when you’re looking to buy or refinance a home as long as the home will be your primary residence.

You can also use a VA home loan more than once, if, say, you end up selling one house and buying another later on.

As always there are a few exceptions. You can check the VA’s website to find out if you or the home you want to purchase might qualify.

VA home loans can offer benefits over a traditional mortgage:

One is potentially lower interest rates. Since the VA guarantees a portion of the loan, they are less risky for lenders, because the guarantee protects the lender. As a result lenders might offer you lower rates than you could get with a traditional mortgage.

Still, different lenders will offer different interest rates and terms on VA home loans, so it’s worth taking some time to shop around for the best deal.

Another potential benefit is that you aren’t generally required to make a down payment, which means you could finance 100% of the home’s value.

For a traditional mortgage, lenders often require borrowers to make a down payment of at least 20% of the home’s value. If they don’t, they typically have to pay private mortgage insurance which can significantly add to the cost of the loan.

But, with a VA home loan, you aren’t required to pay mortgage insurance if you don’t make a down payment.

Now, there are other fees for VA home loans - like the funding fee- which we'll discuss later. But, if you don't have savings to put toward a down payment, not having to pay mortgage insurance will likely save you quite a bit of money.

On the other hand, not putting anything down means you’ll be taking out a larger loan, so over time you will likely pay more in interest.

For example let’s say you buy a $180,000 house with a 30-year fixed rate home loan at 3.5% interest. If you don’t make a down payment, you could pay a total of about $291,000 for your house over the life of the loan.

On the other hand, if you were to make a ten percent down payment of $18,000, you’d end up paying a lot less. You’d have lower monthly payments and you’d pay about $262,000 over the life of the loan… Adding your original $18,000 down payment, you might pay a total of about $280,000 for the same home.

That’s a difference of about $11,000. So, as you can see, if you can make even a small down payment, you could save money in the long run.

In addition to the typical closing costs and fees, there are two fees specific to getting a VA home loan that are worth noting: the appraisal fee and the funding fee.

When you apply for a VA loan, your lender will arrange an appraisal with a VA-approved appraiser. This required appraisal protects both you and the bank by making sure the home meets the minimum property requirements set by the VA—basically that the property is safe, structurally sound and that your purchase price is a fair value. In most parts of the country, an appraisal will cost you around $400 to $500. You can find out what the maximum allowable appraisal fee will be for your region at va.gov.

There is also a “funding fee.” This is a one-time fee on the loan that is intended to reduce the loan’s cost to taxpayers. It’s charged as a percentage – from 0 to 3.3% of the total amount of your loan. What you’ll be charged depends on a variety of factors, including some of the details of your military service and how much of a down payment you make on your home – the lower your down payment, the higher your funding fee.

This funding fee can be bundled with the rest of your loan, so you won’t have to pay it out of pocket at the closing, but bundling it with the rest of your loan means you’ll accrue interest on this fee.

When you take into consideration additional interest over the life of the loan- this fee can be significant,

so again, if you can afford it, making just a small down payment, and even paying the funding fee upfront, can save you money over the long run.

The US Department of Veterans Affairs has a funding fee table that can help you estimate what percentage you might pay at va.gov.

There are some circumstances which might make it difficult for you to qualify for a VA home loan—as well as some limits on the amount you can borrow without making a down payment.

If you have a lot of debt in relation to the amount you earn, it could keep you from qualifying for a loan.

And if you have a low credit score, it won’t necessarily stop you from getting approved by the VA for a VA home loan, but it could keep you from getting approved by a specific lender. And, like other types of loans, the better your credit score, the lower the interest rate you will likely be offered.

There also are some limits on what you might be able to borrow. While the VA doesn’t put a cap on how much you can borrow, there is a limit on the amount they can be held liable for. This can affect how much money a lender will loan you, and if you might be required to make a larger down payment. You can find out more about these limits at va.gov.

It’s also worth noting that VA home loans can take longer to process than traditional mortgages.

Down the road, the VA can be a source of assistance and support if you encounter financial hardships and cannot make your monthly loan payments on your home. They can help negotiate with your lender on your behalf and help you find an alternative to foreclosure if you need it.

Finally, before you buy a home, think about whether homeownership is right for you right now. With the cost of buying and selling a home, including the closing costs, property taxes, home upkeep and maintenance, renting could be a cheaper alternative if you need to relocate in the near future.

A VA home loan can be a great benefit for those who qualify—especially if you want to buy a home but haven’t yet saved enough for a full down-payment.

Kentucky USDA Rural Housing Mortgage Lender: Kentucky USDA Rural Housing Updated Guidelines for...

Kentucky USDA Rural Housing Mortgage Lender: Kentucky USDA Rural Housing Updated Guidelines for...: 2021 Kentucky Rural Housing changes for income and property USDA has announced the publication of the revisions in Chapter 9 of the HB-1-355...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Kentucky First Time Home Buyer Programs to Conside...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Kentucky First Time Home Buyer Programs to Conside...: First Time Home Buyer Programs to Consider for 2021 Kentucky Homebuyers. Zero Down Mortgage Loans in Kentucky The Kentucky VA and the Kentuc...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Kentucky First Time Home Buyer Programs to Conside...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Kentucky First Time Home Buyer Programs to Conside...: First Time Home Buyer Programs to Consider for 2021 Kentucky Homebuyers. Zero Down Mortgage Loans in Kentucky The Kentucky VA and the Kentuc...

• Kentucky Federal Housing Administration (FHA) loans: “With a 3.5% down payment, Kentucky homebuyers may be able to get an FHA loan with a 580 credit score or higher. If you can manage a 10% down payment, though, that minimum goes as low as 500.”
• Kentucky Conventional loans: “The most popular loan type typically comes with a 620 minimum credit score.”
• US. Department of Agriculture (USDA) loans: “In general, lenders require a minimum credit score of 640 for a USDA loan, though some may go as low as 580.”
• US. Department of Veterans Affairs (VA) loans: “VA loans don’t technically have a minimum credit score, but lenders will typically require between 580 and 620.”

VA Home Loans Eligibility Frequently Asked Questions

 

Kentucky VA Home Loan Lender Info

Eligibility Frequently Asked Questions

Questions about who is eligible for a VA loan and reuse of eligibility for another VA loan.

Q: How do I apply for a VA guaranteed loan?

A: You can apply for a VA loan with any mortgage lender 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 lender that you are eligible for a VA loan.

Q: How do I get a Certificate of Eligibility?

A: Complete a VA Form 26-1880, Request for a Certificate of Eligibility: You can apply for a Certificate of Eligibility by submitting a completed VA Form 26-1880, Request For A Certificate of Eligibility For Home Loan Benefits, to the Atlanta Eligibility Center, along with proof of military service. In some cases it may be possible for VA to establish eligibility without your proof of service. However, to avoid any possible delays, it's best to provide such evidence.

Q: Can my lender get my Certificate of Eligibility for me?

A: Yes, it's called Web LGY. Most lenders have access to the Web LGY system. This Internet based application can establish eligibility and issue an online Certificate of Eligibility in a matter of seconds. Not all cases can be processed through Web LGY - only those for which VA has sufficient data in our records. However, veterans are encouraged to ask their lenders about this method of obtaining a certificate.

Q: What is acceptable proof of military service?

A: If you are still serving on regular active duty, you must include an original statement of service signed by, or by direction of, the adjutant, personnel officer, or commander of your unit or higher headquarters which identifies you and your social security number, and provides your date of entry on your current active duty period and the duration of any time lost.

If you were discharged from regular active duty after January 1, 1950, a copy of DD Form 214, Certificate of Release or Discharge From Active Duty should be included with your VA Form 26-1880. If you were discharged after October 1, 1979, DD Form 214 copy 4 should be included. A PHOTOCOPY OF DD214 WILL SUFFICE.....DO NOT SUBMIT AN ORIGINAL DOCUMENT.

If you are still serving on regular active duty, you must include an original statement of service signed by, or by direction of, the adjutant, personnel officer, or commander of your unit or higher headquarters which shows your date of entry on your current active duty period and the duration of any time lost.

If you were discharged from the Selected Reserves or the National Guard, you must include copies of adequate documentation of at least 6 years of honorable service. If you were discharged from the Army or Air Force National Guard, you may submit NGB Form 22, Report of Separation and Record of Service, or NGB Form 23, Retirement Points Accounting, or it's equivalent. If you were discharged from the Selected Reserve, you may submit a copy of your latest annual points statement and evidence of honorable service. Unfortunately, there is no single form used by the Reserves or National Guard similar to the DD Form 214. It is your responsibility to furnish adequate documentation of at least 6 years of honorable service.

If you are still serving in the Selected Reserves or the National Guard, you must include an original statement of service signed by, or by the direction of, the adjutant, personnel officer, or commander of your unit or higher headquarters showing the length of time that you have been a member of the Selected Reserves. Again, at least 6 years of honorable service must be documented.

Q: How can I obtain proof of military service?

A: Standard Form 180, Request Pertaining to Military Records, is used to apply for proof of military service regardless of whether you served on regular active duty or in the selected reserves. This request form is NOT processed by VA. Rather, Standard Form 180 is completed and mailed to the appropriate custodian of military service records. Instructions are provided on the reverse of the form to assist in determining the correct forwarding address.

Q: I have already obtained one VA loan. Can I get another one?

A: Yes, your eligibility is reusable depending on the circumstances. Normally, if you have paid off your prior VA loan and disposed of the property, you can have your used eligibility restored for additional use. Also, on a one-time only basis, you may have your eligibility restored if your prior VA loan has been paid in full but you still own the property. In either case, to obtain restoration of eligibility, the veteran must send a completed VA Form 26-1880 to our Atlanta Eligibility Center. To prevent delays in processing, it is also advisable to include evidence that the prior loan has been paid in full and, if applicable, the property disposed of. This evidence can be in the form of a paid-in-full statement from the former lender, or a copy of the HUD-1 settlement statement completed in connection with a sale of the property or refinance of the prior loan.

Q: I sold the property I obtained with my prior VA loan on an assumption. Can I get my eligibility restored to use for a new loan?

A: In this case the veteran's eligibility can be restored only if the qualified assumer is also an eligible veteran who is willing to substitute his or her available eligibility for that of the original veteran. Otherwise, the original veteran cannot have eligibility restored until the assumer has paid off the VA loan.

Q: My prior VA loan was assumed, the assumer defaulted on the loan, and VA paid a claim to the lender. VA said it wasn't my fault and waived the debt. Now I need a new VA loan but I am told that my used eligibility can not be restored. Why?

Or,

Q: My prior loan was foreclosed on, or I gave a deed in lieu of foreclosure, or the VA paid a compromise (partial) claim. Although I was released from liability on the loan and/or the debt was waived, I am told that I cannot have my used eligibility restored. Why?

A: In either case, although the veteran's debt was waived by VA, the Government still suffered a loss on the loan. The law does not permit the used portion of the veteran's eligibility to be restored until the loss has been repaid in full.

Q: Only a portion of my eligibility is available at this time because my prior loan has not been paid in full even though I don't own the property anymore. Can I still obtain a VA guaranteed home loan?

A: Yes, depending on the circumstances. If a veteran has already used a portion of his or her eligibility and the used portion cannot yet be restored, any partial remaining eligibility would be available for use. The veteran would have to discuss with a lender whether the remaining balance would be sufficient for the loan amount sought and whether any down payment would be required.

Q: Is the surviving spouse of a deceased veteran eligible for the home loan benefit?

A: The unmarried surviving spouse of a veteran who died on active duty or as the result of a service-connected disability is eligible for the home loan benefit. If you wish to make application for the home loan benefit as a surviving spouse, contact our Atlanta Eligibility Center. In addition, a surviving spouse who obtained a VA home loan with the veteran prior to his or her death (regardless of the cause of death), may obtain a VA guaranteed interest rate reduction refinance loan. For more information, contact our Atlanta Eligibility Center.

[NOTE: Also, a surviving spouse who remarries on or after attaining age 57, and on or after December 16, 2003, may be eligible for the home loan benefit. However, a surviving spouse who remarried before December 16, 2003, and on or after attaining age 57, must apply no later than December 15, 2004, to establish home loan eligibility. VA must deny applications from surviving spouses who remarried before December 16, 2003 that are received after December 15, 2004.]

Q: Are the children of a living or deceased veteran eligible for the home loan benefit?

A: No, the children of an eligible veteran are not eligible for the home loan benefit.