What you need to know about VA Loans and Buyers

What you need to know about VA Loans and Buyers

A VA loan or veterans loan is slightly different than a typical conventional or FHA loan and with over 2.3 million veterans living in California alone, VA financing plays a huge part in the buying and selling of real estate.

Any veteran, past or present, is eligible for a VA loan. Those on active duty in any branch of the military or who have served 90 days during wartime or 181 continuous days during peacetime.

Benefits to VA loans include 100% financing meeting buyers can purchase a home with zero down. This is one of the few financing options that allow zero down loans (the USDA also allows 100% financing in the specific areas for eligible properties).

Eligibility also includes a credit score of 620 to qualify and eligible applicants can qualify up to a 57% debt to income ratio, which is higher than most FHA and conventional loan.

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The maximum loan amount varies but in Contra Costa County the limit is $987,500. For purchases over this amount, VA Jumbo loan amounts may be calculated and additional down payments may be required.

Many zero down loans and FHA mortgages require monthly private mortgage insurance or PMI. The advantage to a VA loan is that this added insurance is not necessary. This allows the VA buyers to have a lower monthly mortgage payment and may allow them to purchase a larger home.

Can VA Buyers Purchase after a Foreclosure or Short Sale?

If you've been through a foreclosure, bankruptcy or short sale, there is a waiting period before you can reapply. For a short sale and foreclosure the waiting period is only two years and then you may reapply for VA financing. For a chapter 7 bankruptcy there is a two-year waiting period and for Chapter 13 a one-year waiting period.

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One of the drawbacks to a VA loan is that it must be your primary residence. You may not use a VA loan to purchase investment property, second homes or vacation residence. If you already own a home with VA financing you may qualify done to purchase a new home with the new VA loan.

So how do I get started?

One of the best ways to get started is to speak with a real estate agent that has connections with VA lenders in your area. At the San Ramon real estate agent I have numerous resources and referrals that can help when purchasing a home using VA financing. Call me today and let's get started on the process. It's very easy and we’re here to answer any questions you have along the way.