The Department of Veterans Affairs (VA) is an entity that insure VA loans when lenders issue them. Lenders have fewer risks because of this insurance, and borrowers benefit by having fewer eligibility requirements to meet. Are you curious about these loans and wondering if you might qualify for one? Here are some of the primary requirements you must meet for a lender to approve a VA loan for you.
Certificate of Eligibility
No one can get a VA loan without getting a certificate of eligibility (COE) from the VA. This certificate proves that the borrower served the necessary time in the military to qualify for a VA loan. You must apply for the certificate through the VA, and you will need to show it when you apply for a VA loan. If you do not have one, you should get one before applying for a loan. If you cannot get one, you will not be eligible for this loan type.
Lenders that issue VA loans set the credit score requirements, but most lenders will approve loans with scores over 580. You can ask a lender about the score requirements to see if you meet them. If you do not, you might want to work on your credit for a few months to see if you can improve it enough to qualify.
The next factor to consider is the down payment requirements. You might qualify for a VA loan even with no money down. However, VA loans require paying a one-time funding fee. The funding fee costs more if you have no money down. If you can put some money down, you will pay less for the fee.
Lenders also consider a person's income when approving VA loans, and they use a ratio for this part of it. The ratio is a debt-to-income (DTI) ratio, which helps lenders see if you can afford to repay a mortgage loan.
You might have limits with the types of homes you can buy with a VA loan, too, and you can ask your real estate agent or lender to learn more about this factor. There are also requirements with loan limits. You cannot borrow more than a specific amount. Your lender can help you learn more about the loan limits. If you are interested in a VA loan, talk to a lender or a company like Dominion Capital Mortgage to find out if you qualify for one.
How many times have you put off making repairs around your home because you didn't have the money to make them immediately? Have those decisions caused even more repair bills because you waited to make the repairs? I have done this several times in the past, and, oftentimes, not making those repairs have cost me far more to complete because the damage spread. The whole reason I created my blog was to help others find the financing they need to make home repairs without worrying about choosing the wrong type of financing option. Hopefully, my hard-learned lessons will help you avoid the same struggles that I have undergone.