VA Mortgage

Those currently serving our country, as well as veterans of the Armed Forces or National Guard, and surviving spouses have access to the flexible and affordable VA mortgage loan program.

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What Is A VA Mortgage?

A VA mortgage is a unique home loan program dedicated to veterans and active military personnel. Lenders offer VA mortgages, which are backed by the Department of Veterans Affairs. The VA doesn’t underwrite or fund the loans; it guarantees them for lenders that offer them. These loans provide veterans with an affordable way to become homeowners.

VA Mortgage Requirements

VA loan qualification is based on specific requirements. Here are the six basic requirements you must meet to qualify for a VA mortgage.

Credit

Most lenders require a minimum credit score of 620 if you want to be approved for a VA mortgage. The VA doesn’t have specific requirements and the 620 threshold is a lender overlay. An overlay is an additional underwriting guideline that is added on by the lender. Also, lower credit scores may impact your conditions for closing and possibly your locked mortgage rate.

Income

Most mortgage programs focus on your debt-to-income ratio however that is not the case with the VA mortgage program. Guidelines are more focused on a disposable income calculation and your DTI plays a secondary role. Most of the time the disposable income rule equates to a 43% DTI, but there are instances where someone with a 50%+ DTI gets approved.

Equity

If a loan applicant is eligible for full entitlement, then there are no equity requirements (you can buy a home with zero down). And there is no mortgage insurance. If you don’t have full entitlement, then you will have to have a down payment if you want to use the VA mortgage program. And a higher down payment reduce your VA funding fee.

Appraisal

Most VA loan programs require an appraisal. The appraisal will be completed by an independent licensed appraiser. The VA Streamline Refinance program does not require an appraisal.

Asset

The VA mortgage loan program does not require assets for reserves. If you are providing a down payment, you’ll be required to send in two months of asset statements showing that amount is available.

Documentation

You’ll need to provide two years of income documentation, the standard mortgage documentation, and a Certificate of Eligibility. If you are doing a IRRRL streamline refinance; this generally does not apply.

Additional VA Mortgage Requirements

According to the guidelines of the Department of Veterans Affairs, veterans with any discharge except dishonorable and who served at least the minimum required time are eligible for a VA home loan. You’re eligible after 90 days of consecutive service if you’re actively serving. If you’re separated from the service, your requirements vary from 90 days (the full period you were called for) to 24 consecutive months of service.
If you served in the National Guard or Reserves, you’d need six years of duty to be eligible.

You need just ninety days of consecutive service if you’re currently serving in the National Guard or Reserves. If you’re a surviving spouse of a veteran who lost his/her life in the line of duty or because of complications of his/her time in the service, you may also be eligible unless you remarry.

What Is VA Entitlement?

When applying for a VA mortgage, you must prove you’re eligible via your VA Entitlement. All eligible veterans get full or partial entitlement. Eligible veterans will receive a Certificate of Eligibility; this certificate demonstrates that you meet the basic requirements for a VA home loan.

If you have full entitlement, you can buy a home for any price provided you meet the necessary income requirements. If you don’t, you’ll need to make a down payment on any part of the loan that’s not guaranteed. The amount is typically low, but it’s important to understand how it works.

Who Should Consider A VA Mortgage Loan

Anyone currently serving our country, veterans, or their surviving spouses should first consider a VA loan before any other mortgage program. VA loans have great rates and flexible underwriting guidelines to help loan applicants qualify.

VA Mortgage Rates

Most days, VA mortgage rates are the lowest compared to all other mortgage programs. Sometimes, VA mortgage rates are .25% to .375% lower than conventional rates.

Your VA Loan Partner

If you are considering a new VA loan, consider partnering with the team behind California Mortgage Finder. Over 20+ years of experience to help you find the right VA mortgage.

Low Rates: We keep our costs low and pass those savings on to you so that we can offer below-industry-average mortgage rates.

Exceptional Service: We’re hyper-focused on providing exceptional service to each and every client.

Streamline Refinance: The VA loan program offers one of the best refinance programs in the industry, the VA Streamline Refinance (IRRRL). It offers amazing rates and crazy fast closing times.

Get The Right VA Mortgage

Have you ever worked with a loan officer who didn’t listen and ended up giving you a mortgage that wasn’t the best fit? At California Mortgage Finder, we listen and look for ways to provide you with the right VA mortgage. We ask questions and learn about your short and long-term financial goals, then dive in and find the best VA mortgage structure to help you meet those goals.

VA Mortgage Benefits

The VA mortgage loan program’s most significant benefit is its focus on the people who currently serve or have served our country. At California Mortgage Finder, rates are low, and qualifying is relatively easy.

No Down Payment

If you have full entitlement, then you can buy a home with no down payment. Even if you don’t have full entitlement, your down payment requirement will probably be minimal.

VA Mortgages Are Assumable

PA VA mortgage is assumable, even if the homebuyer is not a veteran. In a high-interest rate environment, that is a huge selling point (if you need to sell your home).

No Loan Limits

If you have full VA entitlement, then you do not have a VA set loan limit. However, most lenders do have an overlay for this so check with your loan officer to find out what your VA loan limit is.

Industry Low Rates

VA mortgage rates are generally lower than all the other mortgage programs (Conventional, FHA, USDA etc).

Understanding The VA Home Loan Funding Fee

Most veterans pay a VA loan funding fee. The only time you don’t is if you are determined disabled by the VA and have a disability letter. In this case, you may pay a reduced funding fee or no fee at all.

If you aren’t disabled, you’ll pay 2.3% of the loan amount upfront the first time you use your benefits and 3.6% for any subsequent uses.³

If you make a down payment, though, the amount may drop:

5% down payment – 1.65% funding fee
10% down payment – 1.4% funding fee

The VA home loan funding fee is subject to change based on annual Veterans Administration guideline reviews and directives.

VA Home Loan Streamline Refinance

The VA Streamline refinance program is one of the best refinance programs in the country. You must have a current VA home loan to apply for the streamlined refinance.

Current VA borrowers can take advantage of lower rates or change a loan’s term with the VA Streamline Refinance program (aka VA IRRRL). You don’t need to verify your income, assets, credit score, or home value (this may vary by lender).

Instead, the VA tells lenders to rely on your payment history. If you’ve made your mortgage payments on time for the last 12 months, you can prove you benefit from the refinance, and you meet the basic VA home loan requirements – you’re approved for the streamlined refinance program.

Explore Some Of Our Other Mortgage Programs

Conventional

A conventional mortgage is the most common mortgage program. Fannie Mae and Freddie Mac set the base guidelines.

FHA

FHA is a powerful program for those with less-than-perfect credit and a low down payment (or little equity).

Jumbo

If your loan amount is above the conforming loan limit, you should consider the Jumbo Mortgage program.

Second

If you have less than 20% down and want to avoid mortgage insurance, then you’ll need a second mortgage.

VA Mortgage FAQs

Here are some common questions and answers loan applicants have about the VA mortgage loan program.

Can Sellers Pay Closing Costs For A VA Borrower?

Yes, they allow sellers to pay all your loan costs (up to a certain point). This means you could come to the table with $0 and close on your loan. Sellers can pay up to 4% of the purchase price in seller concessions; however, sellers are not obligated to do this.

Can A Surviving Spouse Use A Veteran’s VA Benefit?

If the veteran was eligible for VA benefits and the surviving spouse didn’t remarry, then yes, a surviving spouse can use a veteran’s benefits to buy a home to live in.

Can You Own More Than One House With A VA Mortgage?

Typically, you can only own one home with a VA loan, but exceptions exist. You must be able to prove that you have to move, whether due to your job or because you have outgrown your home. If the VA approves it, you can keep your existing home and use your remaining entitlement to buy another house.
If you don’t have enough entitlement to cover the new loan, you may need to make a down payment on the new home.

Is There a Pre-Payment Penalty?

No, there is no pre-payment penalty with a VA mortgage.

Does The VA Have A Bank Statement Program?

No, VA mortgages don’t have a bank statement option.