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When someone has served in the military and wants to buy a home, one of the first things they should do is look for a VA home loan. This loan allows the buyer the opportunity to purchase a home with no down payment. They may not be required to pay mortgage insurance every month. There may be limitations on closing costs paid by the buyer. And an appraisal detailing the value of a property could also be provided.

What amount of time is required?

Answering this question accurately can be difficult. Most VA loans can be closed within 45 days. This is common in the mortgage industry. There are a number of steps in the approval process and getting pre-approved is one way to shorten your closing time. Pre-approval means that a person has met the lender’s basic requirements for a loan before starting the process. The time for a seller to move out of the home and a buyer to move into the home can affect the closing time. An agreed moving date can also make the process longer or shorter. The VA assessment also plays a role. If the appraiser awards the loan based on needed repairs, the closing date could be extended for weeks and sometimes even months. After an appraisal, the VA loan must go through the underwriting process. This is the final step. The need for more documentation or the resolution of eligibility issues may cause the closing date to be extended.

How much income do I have to make to be approved?

When a person applies for a VA home loan, they will hear about a formula known as the debt-to-income ratio (DTI). DTI takes the VA loan applicant’s monthly debt payments and compares them to their gross monthly income. A lender will focus on monthly debts, such as the cost of housing, unsecured debt, and more. The DTI ratio benchmark for a VA loan is approximately 41 percent. When it’s more, a lender may want additional financial information. If a person has a high percentage of debt compared to her income, they should not give up. Some lenders will provide a VA loan with higher DTI ratios.

How long do I have to be on active duty to get a VA loan?

The first step in applying for a VA loan is to complete and submit VA Form 26-1880. This is to request a Certificate of Eligibility. This certificate is provided by the Veterans Administration. It is proof that a person is eligible for a VA loan. It does not guarantee that a person will be approved for a loan. The required length of time on active duty is determined by how long a person was in the military. A person who served in the Gulf War must have completed 24 months of continuous active duty or for at least 90 days and received a discharge other than dishonorable. A person will qualify if he served during this time for less than 90 days but has a service-connected disability. For specific length of service requirements for a VA loan, contact the Veterans Administration.

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