Any Advice When Applying For Va Home Loan?

[mrsvet28]

MrsVet here,

Mrvet and I are interested in a place we found at a good price and we need some peace and quiet now-this city here is becoming not a good place to be--we qualified and got the certificate years ago, but never used it for various reasons , we were free spirited and moved around-but realtor said we need updated one-I sent out the form today to Cleveland - along with the dd214- any advice on what to watch for -and since we are in the remand level does it matter? We are growing weary, now I am getting sick from all of this stress with this claim and need some peace and quiet on the mighty river- where I will write a bestseller!! -Any tips much appreciated Thanks to all-

[purple]

I didn't think your credit score mattered that much since it's a VA loan...I only say that because when I got mine I had had a recent bankruptcy and mine went through without any problem.

My credit was nill.

Maybe they've changed their requirements since then.....12 years ago.

[Eric_M]

My advice would be to find a lender/mortgage broker who is familiar with VA loans.

A good test is the waving of the fees for disabled vets, seemed like only a few knew about it.

Shop around. Credit score plays a factor in rates. Your VA certificate keeps you from having mortgage insurance.

Good luck....Eric

[cjevans]

Erick can you please explain about "mortgage insurance" with a VA certificate???? Are you talking about home owners insurance?

[Pete53]

My main advice is that when they try to talk you out of VA loan just say no its a VA Loan or nothing.

[Eric_M]

From what I understand, most people have to pay "mortgage insurance" if they don't have enough down payment, this protects the bank. This increases their monthly payment.

Your VA certificate is the government saying they will cover part of the loan if you default. So no mortgage insurance needed.

Homeowners insurance = we all have that in-case of disaster.

"Va loan or nothing" is good advice, there are lots of loan programs, but VA loans are regulated to help protect you.

It's a great time to buy....Good luck....Eric

[12R3G]

Erick can you please explain about "mortgage insurance" with a VA certificate???? Are you talking about home owners insurance?

From what I understand, most people have to pay "mortgage insurance" if they don't have enough down payment, this protects the bank. This increases their monthly payment.

"mortgage insurance", ususally referred to as "PMI" (Private Mortgage Insurance) is an additional monthly payment if your FIRST mortagage if for more that 80% of the purchase price. $100k house, $80K First mortgage, no PMI...anything above will require you to pay PMI. This is the bank's insurance should you default on your loan.

The VA home loan advantage is a no (or much lower) downpayment, no PMI and, in some areas, higher "conventional" loan limits (short answer, conventional = lower interest rate, jumbo = higher interest rate) than would be available with an FHA, or commercial loan.

Disabled Vets--receiving compensation--are exempt from any VA funding fee (not to be confused with the lender's origination fee which, among other things, pays the loan officer's commission on the loan).

In an odd loophole that only a banker could understand, you can borrow more than 80% of the purchase price of your home using a commerical loan and not have to pay PMI each month. If the lender will go for it (might be a little harder in today's market), you can obtain a first mortgage equal to 80% of the purchase price (no PMI), add a 10% cash downpayment, and borrow the remaining 10% using a second mortgage--closing both loans at the same time. Bankers refer to this as an "80-10-10" loan. While the second mortgage will have a higher interest rate than the first, you'll probably find the monthly payment for the second is less than what the PMI would cost. PMI is lost money to you and is not tax deductible--it only benefits the bank (and the insurer). Second mortgage payments pay down principal on the loan (increasing home equity) and the interest payments ARE tax deductible. Strange, but true--I've used this technique.

Why go commercial vs VA? Interest rates (generally less), underwriting (my experience is that the VA is actually tougher on underwriting than commercial loans since the government is on the hook if you default). I've done VA (2 loans, and probably a 3rd when we move), FHA (2 ?), and commercial (8?) including purchases and refinances. Each has their slightly different standards and quirks. All of them are paperwork nightmares.