Are you a Veteran? If so, 100% financing is still available to you for your home purchase financing through a single low rate 30 year fixed mortgage. When many home buyers (especially first timers) are squeezed out of the market for lack of a down payment, Veterans can purchase with little to no cash investment based on Seller contributions for closing costs. This is just where the benefits start. Let's look a little closer.
It's OK to own another home, you don't have to be a first time buyer. If you have never used your VA loan benefits before, then the Funding Fee (VA's term for mortgage insurance) is lower than that for a "repeat" user with ZERO down. If you do have funds for a down payment - 5% then the Funding Fee is reduced. Veterans' with a service related disability are exempt from paying any Funding Fee for their loan. Also, Exempt from the Funding Fee requirement are unmarried surviving spouses. (The FF is a one time charge added to your loan amount; there are no monthly MI payments - as with typical mortgage insurance.)
Veterans from all branches of the armed forces as well as Reserves and National Guard may qualify. One "watch it" to remember for two un-married individuals -both need to be Veterans on active duty or with honorable discharge. One Veteran and one "civilian or non veteran" cannot buy together using a VA loan. VA loans also have limitations on closing fees that Veterans are allowed to pay. This can cause a problem in purchase transactions where agents are uninformed and sellers are unaware that a heavier burden of the closing costs will be borne by them due to this VA requirement. For items that a Veteran cannot pay include click here:
The maximum potential loan amount for a purchase transaction loan 100/100% loan-to-value/combined -loan-to-value with full entitlement is at $1,094,625. Loan amounts up to 1,500,000 are allowed as long as the VA guaranty plus the veteran's down payment and /or equity equal 25% of the lesser of the sales price or the VA notice of value. All higher loan limits are driven by the VA County loan limit. Be sure to check with your lender for local limits. For CA Count loan limits click here.
Lastly, when applying for a VA loan with a loan amount over 417,000 there are three important key factors;
- Credit scores have to be 720 or better,
- also you will need to have a minimum of 6 moths principle, interest, tax and insurnace payments as reserves in the bank;
- gift funds are not allowed.
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