Veterans and service members sacrifice much of their civilian lives to serve our country, so programs such as the VA Home Loan program have been established to help our armed forces. Wisconsin service members and veterans are able to take advantage of the program that allows them to obtain a loan up to $417,000 without putting a cent down. The VA loan program is stacked with benefits that are specifically designed to help service members find the home of their dreams.
Saving for the upfront costs for a home is usually the biggest hurdle for both civilians and service members. Most service members have trouble building credit and saving for the large down payment required for a conventional loan, due to constant moves and deployments. The VA loan program has no credit requirements and offers the down payment as an option. In addition, lenders do not charge private mortgage insurance on the loan, only a VA funding fee to keep the program alive for the next generation of soldiers. The VA funding fee is only 2.15% of the total loan amount and can be rolled into the monthly payments.
The VA loan program also allows the use of borrowed or gifted funds. Conventional loans require an impeccable record of all monies used for the purpose of the home. Certain banks restrict conventional borrowers from taking gifts from family and friends. However, the VA loan allows monetary gifts; these gifts can be used for the down payment, the VA funding fee, or closing costs. Paying some of these fees initially, while not required, will result in a lower monthly payment.
Conventional loans often make it hard for a veteran to borrow because of the nature of a veteran’s occupation. Moreover, conventional loans create barriers for people who have no credit history or have had financial problems in the past. While bad credit is not encouraged, qualified VA lenders are willing to give veteran borrowers a little more wiggle room than conventional borrowers. Most VA lenders will require a credit score of 620, but everyone is encouraged to apply since loans with less credit have been made in the past.
Eligibility and Other Requirements for Wisconsin Veterans
The VA calculates a veteran’s income through either residual or debt to income ratio (DTI). DTI is calculated using the logic that the veteran's total debt should not exceed a certain percentage of the veteran's total income. The percentage cutoff usually falls around 41%.
Veterans will need to obtain a certificate of eligibility either through a lender or VA loan counselor. The certificate states that a veteran was discharged in good standing and served for the required 90 days on active duty during wartime or 181 days during peacetime or served at least six years in the Reserves or National Guard.
For more information on the VA Home Loan program, contact Dennis Herman or a VA approved lender today!
Matt Polsky is a blogger associated with VA Benefit Blog, a blog focused on providing veterans and service members with current news and information on the VA benefits they have earned through serving our country.
Milwaukee area VA lender: Peter Cannon Home Mortgage Consultant Wells Fargo Home Mortgage | 16001 W Cleveland Ave | New Berlin, WI 53151 MAC N9810-011 NMLSR ID 400610 Tel (414) 224-4732 | Cell (414) 416-9194 | Fax (866) 944-7857 Peter.J.Cannon@wellsfargo.com www.wfhm.com/peter-cannon
Feel free to add your local contact info to the comment section if you are a lender offering VA loans.