​VA Financing

Veterans who are looking to purchase a home also have options, with a prominent one being VA financing. This is a popular option due to its less strenuous credit requirements. Veterans usually find this type of financing is the best option for them when purchasing a new home or refinancing an existing one.

VA financing is secured through a government loan awarded to qualified Veterans through the Veterans Administration based on their duty status while in the military. VA can help buyers with a purchase loan to buy a property at an appealing interest rate. 

The cash-out refinance loan VA offers pertains to homeowners who wish to take cash out their home’s equity to eliminate debt, pay for school or even perform property upgrades. This loan is also sometimes used in the refinancing of a non-VA loan into a VA loan. A guarantee of up to 100% of a property is awarded by VA.

VA home financing can be used for the purchasing of a home or condo in a project that it VA-approved, the constructing of a home and simultaneous buying and enhancing of a property. VA financing also is allowed for the installation of an energy-efficient feature to improve a home, as was as the purchasing of a manufactured home or lot. 

Most times, VA home financing is processed completely by private lenders, as VA only becomes an intricate participant on rare occasions and acts more as insurance. VA guarantees a segment of the loan, as should something go awry and the buyer not be able to fulfill their payment obligations, VA will cover the losses of the lender. 

This guarantee offered by VA makes the buyer more attractive to lenders, which in-turn leads to lenders presenting better terms to the buyer.

Among the top terms lenders often present to buyers using VA financing is 0% down payment as long as the purchase price of the property fails to exceed the property’s appraised value. There’s also a lack of a requirement for a private mortgage insurance premium.

Closing costs can even be financed, plus VA rules limit the total amount buyers can be charged for them. Should a buyer pay off the loan earlier than the original terms, lenders are not allowed to charge penalty fees. 

Furthermore, buyers are not mandated to be first-time buyers when using the VA financing option and the benefit can be re-used. Also, these types of loans are assumable if qualifications are met buy the person assuming the loan.

The home must be for the buyer’s private occupancy. 

Sufficient income is needed, as well as a verified Certificate of Eligibility. For Veterans, the DD Form 214 is the needed to evidence to apply for a COE, which can be done online, through a lender or through mail. Spouses, widows and widowers can also apply for VA financing. 

There’s no cap from VA on how much a buyer can borrow for home funding. Yet, loan limits on the liability total VA assumes do exist. This can impact the amount of capital a lender will offer.
Loan limits consist of the amount a Veteran with a full entitlement ($36,000) can acquire without having to make a down payment.

Lenders usually fund a maximum of up to four times a Veteran’s entitlement without a down payment if the Veteran has qualifying credit and income, as well as if the home’s appraisal price equals the asking price.

With the value of a home being based partly on its location, loan limits vary by county. For Los Angeles County, the loan limit for a mortgage for a one-unit property is $625,000. Riverside County and San Bernadino County both have limits of $417,000. 

Contact Golden Empire Mortgage today at (909) 457-0257 to discuss your options regarding VA financing.