1) What are the differences between VA loans and FHA loans?
Comparing FHA and VA loan programs, most people want to know the differences in down payment requirements, fees, interest rates, mortgage insurance, prepayment penalties, and qualifying standards.
VA loans typically have:
- No down payment required
- No private mortgage insurance
- A VA funding fee which can be rolled into the loan
FHA loans can typically have:
- A 3.5% down payment
- An upfront mortgage insurance premium which can be rolled into the loan
- Monthly mortgage insurance payments
Neither has a prepayment penalty. Both VA and FHA loan programs require owner occupancy. VA home loans are only open to those with VA eligibility.
- Veterans Administration guarantee
- VA Home Loan with no down payment (100% financing)
- Money saved on mortgage insurance
- Low VA Loan Rates
- Never a pre-payment penalty
- Financial counseling from the VA in case of temporary financial difficulties
2) Am I eligible to apply for a VA Loan?
Many people simply want to know whether they are eligible to apply for a VA home loan under the VA eligibility guidelines.
Eligibility has to do mostly with duration of service
3) Can I get a VA loan if I have bad credit?
Many VA-eligible borrowers wonder whether bad credit might be a deal breaker in qualifying for a VA loan. Lenders look at several factors when deciding whether a borrower is qualified for a VA mortgage. For those with a history of bad credit, a common assumption they may have is that their credit isn’t good enough to qualify for a VA loan. Lenders consider debt-to-income ratios credit histories and FICO scores.
How does a prior bankruptcy affect my ability to qualify for a VA loan?
In the case of a prior bankruptcy, the VA guidelines are specific. If a borrower has filed Chapter 7, then he or she cannot qualify for a VA loan for at least two years after the discharge date of the bankruptcy. And, he or she must have re-established satisfactory credit and have stable income that qualifies.
If a borrower has filed Chapter 13, and is still paying the debt, he or she may still be considered for a VA home loan as long as the payments to the court have been made consistently for one year. A court trustee may need to give written approval.
Lenders can require a longer waiting period, such as three or more years after discharge, for any type of bankruptcy.
4) What is the VA funding fee and how does it work?
The VA funding fee must be collected by lenders as required by the Federal Government. Funding fees can be slightly higher for Reserve and National Guard veterans
5) I have already obtained one VA loan. Can I get another one?
Yes, your eligibility is reusable depending on the circumstances
6) Reservist and National Guard VA Home Loan Benefits
In order to qualify for VA home loan benefits, Reservists and National Guard members must have served in the Selected Reserves or National Guard for six years, and be currently serving, or must have
- received an honorable discharge, or
- been placed on the retired list, or
- have received transfer to Standby Reserve or an element of the Ready Reserve other than the Selected Reserve after service characterized as honorable service.
7) Restoring VA Loan Entitlement
One of the most common myths about VA Loans is that once used, the benefit can never be used again. This is simply untrue. VA entitlement can be restored and used again and again. One way is if a VA borrower simply pays off the loan in full and disposes of the property.
8) VA Loans for Men and Women of the Military
Whether male or female, U.S. military veterans who qualify can receive a VA loan with great advantages over conventional loans.
VA mortgages have some distinct features that make them hard to beat compared to other loan programs. VA loan advantages include:
- Zero down payment required
- 100% maximum loan-to-value ratio on purchases and refinances
- No private mortgage insurance required
- No pre-payment penalties
- Relaxed qualifying standards
- Competitive interest rates
- Cash-out and debt consolidation refinance options
- Streamline rate reduction of existing VA loans
- Qualified loan assumption
9) I am working with a Realtor, is this OK?
Yes, of course. Once you find the home and the contract is accepted we take it from there.
10) Just want to talk to someone?
Give us a call at 405-348-9919 and we will answer any questions you may have.