In this video we learn about what a VA Loan is and what the requirements are/what you will need to get one. This applies to both First Time Home Buyers and re-peat borrowers!

Additional Resources:
Spouse Benefits 👉 www.va.gov/disability/survivor-dic-rates/
VA Spouse Benefits 👉www.va.gov/housing-assistance/home-loans/surviving…
Request DD-214 👉www.va.gov/records/get-military-service-records/
Eligibility requirements for VA home loan programs
www.va.gov/housing-assistance...
VA funding fee and loan closing costs
www.va.gov/housing-assistance...

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So let’s start with the basics—what is a VA loan? A VA loan is a mortgage on primary home (not investment property). Supplied as a benefit to Veterans and qualified spouses of Veterans. These loans are backed by the US department of veteran affairs, which means there are some pretty strict guidelines that protect you as a Veteran, but that also means there are some that you have to meet in order to get a VA loan.

WHO—qualifies for a VA Loan?

Veterans
Active duty personnel
Reservists
National Guard members
Some surviving spouses

You will need to get copy of your DD214 and Certificate of Eligibility. This tells you and the lender if you are eligible for a VA loan/how much your Entitlement is.

For a VA loan you can:
*Do a 15 or a 30 year Mortgage.
*Fixed rate mortgages- which means the interest rate doesn’t change for the life of that loan unless you refinance.
*0% down payment.

Closing costs and Pre-Paid taxes and insurance. Generally speaking closing costs are going to be between 2k and 10k. I typically recommend the rules of three here. Any time you are shopping for a service get three quotes. So contact three lenders (one from your realtor, one of the online guys and one from a local bank or regional bank that you use. Having three quotes will let you compare costs, interest rate and you can use them to compete against each other because most of them will at least attempt to price match!
You can ask a seller to pay up to 4% of the purchase price into your costs, otherwise you would have to pay it, and it would be due at closing.

Next is the funding fee. This is part of a VA loan that can make it not worth it for you. The funding fee is a fee that the VA requires. It can be financed, but you are still paying it and it may make it not worth getting a VA loan!
if you have less than 5% down the fee is 2.3% of the mortgage!
if you have 5-10% down it’s 1.65%

*if you are putting more then 3-5% down I would at least look at a Conventional mortgage and certainly if you have 20% down. Now you would have Mortgage Insurance where on a VA loan you wouldn’t, but it still maybe cheaper!

The funding fee can be waived if you are a Disabled Veteran, receiving a retirement, or a surviving spouse. Also if you are a disabled veteran in some states you can have your property taxes waived as well!

Credit and income. The VA doesn’t require a minimum credit score so in the VA’s eyes you can have good credit, bad credit or no credit. however the lender will!
Generally speaking you will need between a 580-660 minimum. As a credit side note. For most things credit score related having under 740 credit score is going to hurt your interest rate and under 600 credit score is going to eliminate you from most traditional loans. Anything above 740 credit score is bragging rights.

The next piece is income. The maximum most lenders will allow is 41% DTI or debit to income. This is the ratio or percentage of your income that can go to all debt. So for instance if you make 10k per month pre-tax you can have total debt to income at 41% or 4100 so. At 10k/mo lets say you have 2k in other expense that means that you could afford a 2100 mortgage payment with taxes and insurance included, but that doesn’t take into account utilities, trash, fun, investing, eating, or taxes! So the general rule is don’t take out a house payment of 25-35% of your take home pay (pay after taxes and all other things on your pay check). Make sure to discuss this with your lender in a pre-qual or do the math your self and tell them the max house payment you want. This is very important because you don’t want to be house poor and not be able to save for the future and live the life you want!

And finally to wrap it all together you will want to make sure you have
2 years proof of income handy.

If you are self employed you will need:
*2 Years federal personal and business tax returns
With VA income or regular w-2 income you will also need:
*2 years w-2’s/1099’s/disabilty/ssa awards letters.
*2 months bank statements.

If you like what we are doing please condsider Subscribing. We don’t just talk about mortgages, I also go over Investing, Personal Finance, Re