The VA Home Loan program is a benefit for Veterans of the Armed Services and National Guard and also current active duty military personnel and is a program that provides great benefits for our servicemen and servicewomen and Veterans. Here are some of the important features and guidelines of this wonderful home loan program.
Home Loan Limits
Technically there is not an actual VA loan limit. However, in some regards the VA loan program mimics the conventional loan limit, which is currently $424,100 in Maricopa, Pinal and Pima Counties in Arizona.
Up to $424,100 you can obtain a VA loan without a down payment. If you want to obtain a VA loan above $424,100, then for every dollar above that amount a 20% down payment is required. For example, if you wanted to obtain a VA loan for $524,100, then your down payment required would be $20,000 or 20% of the $100,000 over the $424,100 loan limit.
Down Payment Requirement
There is no minimum down payment on a VA loan.
Credit Score
On an VA loan, there is not a set minimum credit score to obtain a loan, but for most lenders, the minimum credit score will be 580. VA loans can often be obtained down to a 500 credit score, but with certain compensating factors.
VA Funding Fee
Any veterans that have a VA service connected disability rating are exempt from the VA funding fee always. For Veterans who do not have this rating, then there is a 2.15% VA funding fee added to the base loan amount of the VA loan, the first time they take out a VA loan and a 3.3% VA funding fee, every subsequent time they take out a VA loan. On a VA Irrrl (streamline) refinance loan, there is 0.5% VA funding fee.
Waiting Periods After Major Credit Events
To obtain a VA loan, you must wait two years after the completion of a short sale or foreclosure, to obtain a new loan. In addition, there is also a two year waiting period after the discharge of a chapter 7 bankruptcy to obtain a new home loan.
Debt To Income Ratios
On a VA loan, the programs basic guide says that your monthly mortgage payments, together with all of your other monthly debt payment, should not exceed 41% of your monthly income. However, with compensating factors, such as a steady job history, assets or good credit, it is not uncommon for higher debt to income ratios to be approved for VA loans, often up to 50% or higher.
These are some of the basics you need to know about the VA home loan program, but of course everyone’s individual situation is unique and it is always best to speak with a licensed lender, such as Strategic Mortgage and explore all available options, for your specific situation.
For more information on current home loan programs and options for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com
Strategic Mortgage, LLC - NMLS#158804- Equal Housing Lender – AZBK#0909514
Vasilios Bill Kamboukos Jr – NMLS#160440
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