Thousand Lakes Realty
Eric Ristey

 Veterans Affairs Mortgages, or VA loans, help veterans obtain financing to purchase a home. These types of loans don’t always require a downpayment and are offered to both military veterans and active members of the military. VA loans are offered through private lenders and are guaranteed by the Department of Veteran Affairs so veterans are not required to pay for mortgage insurance and there is no minimum credit score requirement. Here are a few things you should know about VA loans.


Members of the regular military, veterans, reservists and members of the National Guard are all eligible for VA loans. Spouses of military members who have passed away on active duty or as a result of a service-induced disability are also eligible.
Active duty members qualify after six months of service. Reservists and members of the national guard have to wait six years to apply, but if they are called to active duty before that date, they will gain eligibility after 181 days of service. During a time of war, reservists, members of the National Guard and active military members are eligible after 90 days. Potential VA loan borrowers will need to obtain a Certificate of Eligibility (COE).

 Benefits of a VA Loan

VA loans can be obtained without putting any money down for a down payment. A VA loan also does not require mortgage insurance. This results in large monthly savings for VA borrowers.
A big advantage of a VA loan is the help that is offered to borrowers who are struggling to make payments on their mortgage. The VA can negotiate with the lender on behalf of the borrower.

 Funding Fees
VA loans do carry a one-time funding fee that depends on the down payment and the type of veteran. A borrower in the armed forces obtaining a VA loan for the first time with zero money down will pay a fee of 2.15 percent of the loan amount. If the borrower makes a down payment of 10 percent or more, the fee lowers to 1.25 percent. National Guard members and Reservists typically pay a quarter of a percentage point more in fees than active-duty members. If you are applying for a VA loan for the second time, without a down payment, you would pay 3.3 percent of the total amount of the loan.

 Underwriting Requirements
Although there is no minimum credit score requirement to obtain a VA loan, lenders typically have their own requirements. Many lenders are seeking applicants with a credit score of 620 or higher. Borrowers will also need to prove they have income to repay the loan and will ideally not have high debt.
VA guidelines let veterans use their home-loan benefits a year or two after bankruptcy or foreclosure. VA loans can only be used to finance primary residences and cannot be used to buy a second home or an investment property. There is also no cap on the amount you can borrow.

 I wish you well and invite you to contact me if you have questions.
 Please stay healthy and we hope to hear from you soon to discuss your property search and status.
                                                    Until Next Time!

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