This weeks topic is one of my favorite mortgage terms: VA Loan!
I know, VA Loan doesn't sound very entertaining... but it really is one of the coolest montage products out there and you'd be surprised to learn how many people don't know about it! I thought this would be perfect opportunity to bring in guest writer that could break down all of the facets of this amazing product. Tim Tacl is not only an extraordinary Mortgage Loan Officer at Spire Financial, but he is also a Veteran. This should come in pretty handy since the VA in VA Loan stands for Veteran Affairs! The United States Department of Veterans Affairs is the government entity that guarantees these mortgage loans in the United States.
Take it away Tim!
"The VA Home Loan offers 100% financing and extremely competitive rates for our nation’s Active-duty service members, Retirees, Veterans, Reservist/National Guard and surviving spouse. If you fall into one of those categories and you have not taken advantage of this amazing benefit, then you should!Below I will highlight some of the ins and outs of the VA home loan.
How Do I know if im Eligible?:
This can vary depending on length ones service, type of service, type of discharge and when you served (peacetime or wartime).Most requirements will need a discharge of anything other than dishonorable. If you feel like you have received, an unwarranted “Dishonorable Discharge” your local congressional representative or senator can help with overturning that discharge. The easiest way to determine whether one has VA eligibility is to request a COE.
What is a COE?:
Certificate of Eligibility is what your lender will need in order to verify you are eligible for the VA loan. IN order to obtain a COE the VA will request evidence of service. Below are the various categories and evidence needed for each:
Active Duty Service-member: A current statement of service signed by (or by the direction of): the adjutant, personnel office, or commander of the unit or higher headquarters
Current or former National Guard or Reserve member who has been activated Federal active service: DD214
Current National Guard or Reserve member who has never been Federal active service: Statement of service signed by (or by the direction of): the adjutant, personnel officer or commander of your unit or higher headquarters
If you are a Surviving Spouse in Receipt of DIC (Dependency & Indemnity Compensation) benefits: Submit VA form 26-1817 and veteran’s DD214 ( if available)
If you are a Surviving Spouse and are not receiving DIC (Dependency & Indemnity Compensation) benefits: Submit the following to the appropriate Compensation and Pension office:
Death Certificate or DD Form 1300 – Report of Casualty
Will i pay a Funding Fee?:
All users of the VA Home Loan will be required to pay a funding fee. This is very much like the up-front PMI required on all FHA Home Loans. Unlike FHA loans the funding fee can vary based on the amount one puts down as a down payment and if they have used their eligibility in the past.
Funding Fee Exemptions:
Veteran receiving VA compensation for a service-connected disability, OR
Veteran who would be entitled to receive compensation for a service-connected disability if you did not receive retirement or active duty pay, OR
Surviving spouse of a Veteran who died in service or from a service-connected disability
Funding Fee Table:
Can you Borrow more than the VA Loan Limit/Eligibility?:
Depending on where the property is located, there will be a VA Loan limit specific to each county, just as there is for conventional/FHA loans. The VA Home Loan will only allow 100% financing on the loan limit amount. If the purchase price is higher than this limit, the borrower will be required to bring 25% of the difference from the purchase price and the loan limit.
Purchase Price is $500,000
Loan Limit: $400,000
Amount required from the borrower: $500,000 - $400,000 = $100,000 x 25% = $25,000
Can I reuse my VA loan?:
The short answer is, yes. This can get a little complicated so I highly recommend speaking to a mortgage loan officer to understand how to do this correctly. "