VA Purchase Loans
Most VA-eligible borrowers have seen the need to finance a home through the VA Loan Guaranty Program. With first-time home buyers, there might be even more reasons to utilize the famed home financing program for veterans.
In most cases, first-time home-buyers are young couples simply starting families. Most of them don’t have a huge amount of money to put down on their home purchase. The good part about a VA- guaranteed home loan is that any eligible borrower may get into a good starter house with zero cash down. On the other hand, other mortgage programs require from 3.5% to 20% in cash – regardless of whether you’re a first-time buyer. With a zero-down VA loan, you can save thousands right away.
Where Are You Looking to Buy a Home?
Another reason why VA borrowers save lots of cash upfront is the lack of a private mortgage insurance premium every month. In most cases, conventional mortgage programs demand borrowers have mortgage insurance if there’s less than 20% equity in that house. However, private mortgage insurance (PMI) isn’t required in the VA home loan program since federal banking does away with the need for PMI.
Because of this, VA borrowers don’t get charged for PMI. Any first-time home buyer should understand the significance of savings of up to hundreds every month since they can establish college fees and other future financial endeavors.
VA Refinance Loans
There are some cases, where you as a homeowner, might need some additional cash for a real need. Maybe you want to take care of a 2nd mortgage, you may want to make home improvements to increase your home’s value, or perhaps you have to consolidate a high-interest credit card debt.
In situations like these, your house might be used as a source of equity that you could borrow against – if the timing, terms, and conditions are right. Since each refinancing case is unique, confirm with your mortgage advisor, or lender, on this for more information.
The Loan Procedure for a VA Refinance
In general, a VA Refinance is a much more straightforward and quick process. However, there’s one vital thing to remember: documentation.
You could apply your VA benefits toward refinancing your house and get your monthly mortgage payment down where you want it. And because the VA refi process is usually faster than a conventional, you can stat saving in as little as 3-4 weeks.
If you are looking to speed things up even more you should have all the documentation that you need ready to go.
Below is a shortlist of several documents you might require when applying for a VA Cashout Refinance.
- Your past 30 days worth of pay stubs, illustrating your present year-to-date gross income
- A copy of the W2’s for your last 2 years or. If you’re employed, carry complete tax returns
- A copy of your government-issued photo I.D., or your driver’s license
- The “Note” from your present mortgage
- A copy of your Statement of Service for active military or DD Form 214 release paper
- Awards letters illustrating any pension, disability, or Social Security monies you’re getting
- A Declarations page copy from your House Owner’s Insurance policy
Before applying for your loan, the important first step you should take is to get as much of the required paperwork as possible, since this will reduce much time off of the entire loan process.
Of course, there might be other things you have to present. However, this should ensure the whole process works smoothly. After submitting your application, the loan usually passes via an automatic underwriting system – this offers approval for qualified applicants in order to continue processing your loan.
To be honest, loan processing is actually where most of the time is spent to complete the loan. The processors use the provided details and documents to find out whether you will qualify. One of the first, and most important, things required is the appraisal.
Generally, an appraisal for a VA loan is different from a traditional loan, in that the VA should approve the appraisal. According to the VA, the lender needs to submit the request for their appraisal to them directly.
The VA will then allocate a local VA licensed appraiser, and within 1-2 business days the borrower will be contacted to plan a convenient time for the inspection. After the inspection is complete the appraiser will return the report to the lender as soon as possible.
There’s another inspection to carry out: a wood-eating pest inspection. The VA wants to ensure that there aren’t termites or other pests at that house. Any qualified pest inspector chosen by the borrower can complete this inspection.
However, the borrower requires to inform the inspector that this is meant for a VA loan since they have some paperwork they are needed to use. Once the inspector is done, either the inspector or the borrower should send a copy of that report to the lender, alongside the invoice.