VA Mortgage Loans

How Underwriters Currently Treat Income for VA Loans

January 28, 2012 by admin Leave a Comment

We are fortunate to live near several Military Bases, and we are working with several folks who are using their VA benefits to purchase homes. Mortgage loans backed by the Veterans Administration are 100% loans based on the homes value, and do not generally carry location restrictions like USDA loans do…

We sell our loans to many different banks, and this give us great pricing and great flexability… and is also showing us that underwriters are looking at BAH and BAS pay (along with other income) differently across the board. Since this definitely affects how much home you can qualify to purchase, I figured I’d share what we are seeing TODAY, so that you can be prepared.

At least 2 of the banks we send business to allow BAH and BAS if there is no available base housing in the subject property area. (this is checked by location of the base and by a letter from a commanding officer) Other income can not be used with these banks…

A couple of other banks, will allow BAH and BAS (no matter where the property is located). Any other military income (submarine income, seaman pay, etc) can be used if we prove that it’s going to continue based on your assigned duties.

Still OTHER banks are underwriting loans and allowing the BAH and BAS (regardless of location), but they require that we prove any additional income is likely to continue for 3 more years… and another underwriter (different bank) also wants a 2 year history of receiving the income.

In other words, they are all over the place. If you are purchasing a home and using your VA benefits, we suggest that you find a professional who is familiar with the Underwriting Guidelines used TODAY… because there’s no real standard. Call Steve Thorne, 919-649-5058 for more information!

Filed Under: VA Mortgage Loans Tagged With: bah, bas, fort bragg, home loans for veterans, military pcs move, qualifying for a mortgage ft bragg, veteran home loans

WoWho! VA Does Not Requre A Credit Score!

January 19, 2012 by Eleanor 5 Comments

Well… I wouldn’t get TOO excited! According to the underwriters I’ve talked to lately – even though the VA doesn’t require a Credit Score, clean credit for at least the last 12 months is required.

Here’s good news! No matter what your score is – as long as you meet the minimum score requirements, you will get the best Home Loan Rate for Veteran’s! A lower score will not change your mortgage interest rate with a VA loan!

If you’ve had a Bankruptcy – you can still get a VA Mortgage loan. You must be at least 1 year out of Chapter 13 and 2 years out of Chapter 7. Most underwriters want you to have re-established credit and have those “pesky” 12 months of clean credit. [Read more...]

Filed Under: credit, VA Mortgage Loans Tagged With: credit score guidelines va mortgage, credit score requirements, va home loan bankruptcy, va home loans, va mortgage loan credit score, va mortgage loan credit score guidelines, va streamline refinance

Veteran Home Loan PMI Change Effective 10/11

December 15, 2011 by Eleanor Leave a Comment

Congress is trying to “beef up” military benefits, and they started by lowering the Veteran Home Loan fee for getting a VA Mortgage Loan. The Fee, called a funding fee, is VA’s version of PMI. It’s important to remember that the Veteran’s Administration doesn’t actually MAKE mortgage loans for Veteran’s, they only insure them. The Guarantee Fee covers the default charges the Veteran’s Administration might face if the homeowner goes into foreclosure.

Congress passed H.R. 1383, the Restoring GI Bill Fairness Act of 2011, and with that, the Guarantee Fee on mortgage loans for Veterans will be a little cheaper. The VA Funding Fees was reduced effective October 1st. This was important, because in some parts of the country, Veteran’s who are relocating are not seeing much equity that they can take with them to their new post.

The Funding Fee is charged at loan closing, and is generally added to the loan amount. If you are purchasing a $100,000 home and you have not used your entitlement before, you loan amount will be $101,400. You don’t have to finance in the Guarantee Fee, though. It can be paid through seller contributions, lender credits, or added back to the Veterans loan amount.

Since most Veteran home loans are funded with no money invested for a downpayment, the Funding Fee on those loans will be lowered from 2.15% to 1.4%. This reduction is for those Veteran’s that are first-time users of their entitlement and who are on active duty or honorably discharged.

Funding Fees for subsequent use of entitlement will drop from 3.3% to 2.8% in October, with further reductions to 2.15% in 2012 and 1.25% in 2013. Those Veterans who do make 5% or 10% down payments will see their funding fees drop to as low as a half of a percent. In addition, the National Guard members and Reservists will also see decreases in their VA PMI rates.

Loans for Veterans are one of the last true remaining “no money down” mortgage loan programs in the marketplace. FHA and USDA are now charging monthly fees in addition the the money collected upfront – so this reduction in the funding fee for Veterans should provide a significant money saving benefit to returning service members.

Congress is also hoping that since mortgage rates are so very low, this move will motivate some Veterans who have been waiting to purchase a home! If you have questions about your VA Eligibility Benefits – please call Steve and Eleanor Thorne, Mortgage Banker in Cary – we offer the lowest mortgage rates for homes in NC! 919-649-5058

Filed Under: VA Mortgage Loans Tagged With: VA funding fee, va guarantee fees change, VA Mortgage Loan, va mortgage loans, va pmi, veteran home loans, what are va guarantee fees

Already Used Veteran’s Eligibility to Purchase A Home?

November 28, 2011 by admin Leave a Comment

People moving to Ft. Bragg, in Fayetteville NC might be moving here with little or no equity. Did you know that even if you’ve used your VA eligibility before, you can use it more than once… under certain circumstances.

You need to either:

Pay off your prior VA loan (for instance, sell the property)
The VA allows a one-time only basis, you may have your eligibility restored if your prior VA loan has been paid in full but you still own the property.

In either case, to obtain restoration of eligibility, the veteran must send a completed VA Form 26-1880 to the local VA Center. (In NC the Eligibility Center is in Winston Salem.) We suggest that Veterans include evidence that the previous loan is paid in full with a notice from the bank, and a copy of your HUD-1 Settlement Statement. Including this information will speed up the process, and you will avoid days of delays!

If you allowed the folks who purchased your home to assume your VA loan, you can still get the Eligibility Reinstated. In the case of an assumption, your Eligibility will be restored if the person who assumed the loan is also an eligible veteran, and they are willing to substitute his or her available eligibility for yours. This means the person purchasing your home with an assumption, has to qualify for a VA mortgage for you to be eligible for a NEW VA Mortgage Loan.

The same thing is true if you short sold your home, or did a deed in lieu. If the VA lost money, they will not reinstate your Eligibility. Although you might be released from liability on the loan and/or the debt was waived, our experience is that the VA will not restore the Eligibility.

We’ve been told pretty sternly that “The law does not permit the used portion of the veteran’s eligibility to be restored until the loss has been repaid in full.”

If you are considering a home purchase in NC, and have questions about your Veteran’s Eligibility – please call Steve Thorne 919-649-5057, NC’s Veteran Home Loan Expert! If you want to know VA Home Loan Qualifying basics, click here.

Filed Under: VA Mortgage Loans Tagged With: eligibility for VA mortgage, eligibility reinstated for va home loan, va foreclosure eligibility reinstated, VA home loan, va home loan raleigh, VA Mortgage Loan

VA Mortgage Loan After A Short Sale

June 21, 2011 by admin Leave a Comment

We just answered a question from a Veteran that went something like this, “I sold a home last year that had two mortgages. The first mortgage was paid in full, the second mortgage was not. Can I get a VA Loan now that it’s been more than 12 months?”

There are two really, really important facts that we need before we can answer the Veteran’s question.

The first one is – why did you short sale the home? Strategic Short Sales are not going to sit well with an underwriter, and could be the basis for denying the loan.

Additionally, since it’s been 12 months, we need to know if there were any late payments on the mortgage prior to the Short Sale. If there were missed payments, then VA will make us wait three years before we can do another VA Mortgage Loan.

Since it was a first mortgage that was paid in full, it is unlikely that the Veteran has a delinquent FHA, VA or USDA mortgage loan balance showing. If there WAS a delinquent Government loan balance – you would not be eligible for another Government Insured Loan.

The Veteran in this case has a credit score of 660, and the second mortgage does not show a deficiency balance owed, but it does clearly show on the credit report as a short sale. The reason for the move was because the Veteran lost their job in Florida and relocated to NC with a job they’ve now held for over a year (same line of work). In this case, the Veteran never missed a payment on the mortgage – they simply did not have cash (they’d been living on savings while looking for a job) to cover the $25,000 short on the second mortgage.

In a case like this – 12 months must pass from the time of the short sale, and the application for a VA loan. Our underwriters require that we get some sort of statement from the Second Mortgage Holder indicating that they are not going to file a deficiency balance against the Veteran… we ARE able to make this loan.

If you’ve had a short sale, and you want to know if you can now purchase a new home in North Carolina – call Steve and Eleanor Thorne, Mortgage Banker in Cary , 919-649-5058 – we have the best mortgage rates and the lowest fees available!

Filed Under: VA Mortgage Loans Tagged With: can you get a va loan after a short sale, va home loans, va loan after a short sale, va loan short sale, va mortgage loans

Bankruptcy and VA Home Loans

April 29, 2011 by Eleanor Leave a Comment

We are talking to folks every week who lost a job in the last several years, lost medical insurance – or had some other tragedy that made it necessary for them to take steps they never thought they would have to. The reality is that in today’s economic conditions, unfortunately, bankruptcy has been the only way a family could get a fresh start. As a Veteran, considering a home purchase in North Carolina, you need to know a few things about how Bankruptcy can effect your ability to buy a home.

So, can you get a VA Guaranteed Home Loan if you have a bankruptcy? The short answer is YES!

The good news is that as of today, the VA underwriting guidelines are far more relaxed than the guidelines for other mortgage loan types (USDA, for instance, makes you wait 3 full years before you are eligible for a mortgage). The rules for applying for a VA Mortgage Loan after Bankruptcy are different based upon what type of Bankruptcy you took and weather you were able to KEEP your home, or if it was included in the bankruptcy.

Chapter 7 Bankruptcy

Chapter 7 bankruptcies are essentially when the borrower is freed of all liability from creditors. VA loan guidelines typically call for a 2 year waiting period after a Chapter 7 bankruptcy before you can receive VA financing again.

There are rare circumstances in which the 2 year waiting period will be reduced to 1 instead. You would have to be able to show that circumstances beyond your control were the driving force behind your financial hardship. For instance, we’ve seen this done when a spouse died… we also had a situation where a couple had a children that were less than 12 months apart in age, and the wife could not afford childcare and had to quit her job. If you can prove the extreme circumstance – then we might be able to make it work after the 12 month waiting period.

As mentioned earlier, USDA Home Loan guidelines call for a 3 year waiting period, and conventional loans require a 4 year waiting period. IF you had a home that was included in the Chapter 7 Bankruptcy, and it was foreclosed upon – then VA Underwriters also require a three year waiting period.

Chapter 13 Bankruptcy

Chapter 13 bankruptcies involve the establishment of a repayment plan instead of being cleared of liability immediately.

Veterans and military personnel can qualify for a VA mortgage loan, based upon current guidelines, even when they are still in Chapter 13 bankruptcy. However, you will have to show that you have made a minimum of 12 payments on-time and be approved by the court trustee for the new mortgage loan. This is VERY, VERY RARE… but again, we saw this happen with a couple who had a restaurant, field Chapter 13, they closed their restaurant and went to manage a National Chain Restaurant. That was approved… it just takes the right circumstances.

Once you complete a Chapter 13 Bankrutpcy, VA Mortgage Loan Guidelines allow you to immediately apply for a mortgage! Yippee! Conventional Loan guidelines, for instance require a 2 year waiting period!

Don’ Forget About Your Credit Score

All of this talk about being able to qualify for a VA mortgage Loan after (or while) you have a Bankruptcy, assumes that you have a credit score that’s recovered from this event, and is high enough for the Underwriters to approve. The Veteran’s Administration does not make these mortgage loans – they only insure them. The VA does not have a minimum credit score that they will insure… however, Underwriters have a minimum Credit Score that they will APPROVE… and these days, that number is a MINIMUM of 620… and some underwriters will only allow loans for those Veterans with scores of at least 640. So, even after you have finished the bankruptcy process, there are still actions you need to take to get your credit scores up and increase your likelihood of qualifying for a VA loan after bankruptcy.

For example:

Re-establish your credit as soon as possible if you do not have any creditors after the bankruptcy process. Remember, approving a potential borrower with no credit is almost impossible! We NEED a credit history that’s Clean For At Least 12 Months, with 3 Tradelines! You can re-establish credit using secured credit cards, apply for credit with FingerHut, or you might be able to be added to a credit card with a family member.

Once you re-establish credit, be sure to always make payments on time... and be sure that the folks who are extending credit to you are reporting those payments to all three credit repositories! If you are paying for a car over time, and making payments to the dealer – he’s probably not reporting those on time payments to the credit bureaus! Credit Unions often will not report to all three repositories either, because each submission costs them money!

Get in the habit of checking your credit at a minimum of once a year. This will give you an idea of where you stand, especially when you begin shopping for a VA mortgage loan.

Upon the discharge of your bankruptcy, send a copy of all your discharge paperwork (including all applicable schedules) to the three credit bureaus: Equifax, Experian, and TransUnion. This is important… it’s also important to KEEP the paperwork for at least 7 years.

We do TONS of VA Mortgage Loans in NC. We have bases at Fort Bragg, Pope Airforce Base and Camp Lejuene… plus, there are TONS of Veterans who live in Johnston County, Wake, Harnett and Pinehurst! If you qualify for a VA mortgage loan in NC call Steve Thorne, 919-649-5058. We have BEST Mortgage Loan Rates Available!

Filed Under: VA Mortgage Loans Tagged With: bankruptcy, bankruptcy and va loans, Best mortgage rates, credit scores, foreclosed property, foreclosure, va home loans, VA Mortgage Loan, va mortgage loans, va mortgages, veterans

VA Mortgage Loans and Escrow Accounts

April 18, 2011 by Eleanor Leave a Comment

When a Veteran borrower applies for a VA mortgage loan and closes the deal, they’re responsible for more than just making their monthly mortgage interest and principal payments on the VA mortgage loan. There are property taxes, hazard insurance premiums (also referred to as home owner’s insurance policy for fire, tornadoes or hurricanes), and often there are Homeowner Association dues from the subdivision you purchase in. Timely payment of these items–especially property taxes–is crucial and the Department of Veterans Affairs tasks the lender with the responsibility of making sure such payments are made in a timely manner.

That is one reason why most lenders require an escrow account for a VA loan applicant–it gives the lender the ability to pay the required taxes and insurance without waiting for the borrower to send in the annual payments. Escrow accounts are not required by the VA, but all of the lenders we sell loans to require this type of account as condition of the mortgage loan. You are PRE-Paying your taxes and insurance – meaning that if the tax bill was going to be $2400, the lender would be collecting $200 a month for taxes, and when you get your bill for taxes, you send it to the lender to pay!

With an escrow account, the lender must operate the account according to the laws of the Real Estate Settlement Procedures Act or RESPA. You will not receive interest on this account… but you don’t have to figure out how to pay a $2400 tax bill (for instance) at the end of the year, because you have been contributing 1/12 of that bill with each of your monthly housing payments! 8o)

Those laws include a full disclosure requirement. The lender must furnish the buyer with an “initial escrow account statement”, listing all the activity that will happen on the escrow account including payments made by the borrower and disbursements from the account. RESPA laws require the initial escrow account statement to be furnished when the loan closes or within 45 days of closing. The lender must also supply an annual account of the escrow activity plus any changes for the coming year.

The escrow account does make it simpler to manage routine-but-essential payment issues like property taxes… but at closing, you must establish this account. If you close in June (for instance) and your annual tax bill is sent in September and DUE in December (as it is in Wake County NC) then at the June closing the Seller will be charged for 5 months of taxes – and you will be required to pay in somewhere close to 5 months of taxes. At the end of the year – you will have made payments into the account, and you should have plenty to cover the tax bill.

Let’s assume you pay in MORE than what you were billed. In that case, the lender would review your account, and lower your payments for the next year! Same thing runs true if you’ve UNDER paid… then your monthly payment might go up some.

If you have questions about purchasing a home and using your VA Home Loan Benefits – please call Steve Thorne 919-649-5058 NC’s VA Mortgage Loan Expert – we have the BEST rates!

Filed Under: VA Mortgage Loans Tagged With: escrow account, va escrow account, VA home loan, va home loans, VA Mortgage Loan, va mortgage loans, veterans, what is an escrow account

Tips For Relocating to Fort Bragg

April 4, 2011 by Eleanor Leave a Comment

There are almost 1700 soldiers and their families that will be moving to Fort Bragg (Fayetteville) North Carolina in the next several months. As they are relocating and looking for homes – I thought that this information on Soldier Support would be helpful. Frankly, I was impressed with all of the resources available to Veteran’s and their families.

If you are looking for a new home in NC, and you have questions about your Veteran Mortgage Loan Benefits, please call Steve Thorne, 919.649.5058 Professional Mortgage Planner with THE lowest rates!

Phone: (910) 396-8682
Location: Soldier Support Center – 3rd Fl.
Normandy Drive, Fort Bragg (map)
Hours: M-F 8am-5pm, closed on all Federal holidays

After 5 p.m. customers can obtain ACS information by contacting the FRG Center at 910-432-FRGC. The FRG Center is open M-F until 7 p.m. and is located in the basement of the Soldier Support Center.

RRP provides assistance to military personnel (active duty, retired, National Guard, Reserve), DoD civilians, and family members moving to or from Fort Bragg. RRP provides information on Fort Bragg as well as Army, Air Force, Navy and Marine installations worldwide. Information regarding housing, transportation, legal claims, EFMP, financial management and sponsorship is provided. The program also sponsors monthly pre-move briefings. View Relocation Readiness Tri-fold [.pdf]

Newcomer’s Orientation is every 1st & 2nd Tuesday from 0900-1130 on the 3rd floor of the Soldier Support Center. Information available on schools, housing, employment, medical care, recreation, welcome packet and many other services. For more info and registration, call 910-907-3499. For more events please see the ACS Calendar.

Request a Fort Bragg Welcome Packet

In Processing

Airborne Attic & Lending Closet

MilitaryHOMEFRONT is the official source information for all DoD Quality of Life programs and services for Service members and their families, military leaders and service providers.

Military OneSource is provided by the Department of Defense at no cost to active duty, Guard and Reserve (regardless of activation status) and their families. It is a virtual extension of installation services. Visit Military OneSource today at www.militaryonesource.com or call 1-800-342-9647.

Employment

Civilian Personnel

Employment Readiness Program

Non-appropriated Funds (NAF)

Foreign Born Spouse Orientation

PCS Pre-Move Briefings

Immigration Workshops

Sponsorship Training

Voting Assistance

Reference Guides:
O New Military Spouse [PDF]
O Welcome to the Army [PDF]

ACS Events Calendar
ACS quarterly newsletter

Looking for more information about qualifying for a VA Mortgage Loan? We have tons of information to share about VA Benefits and Improving your Credit Score to qualify for a VA Mortgage Loan! Welcome to NC! We think you’ll like it here! Call Steve Thorne, 919-649-5058 if you need help with obtaining your Certificate of Eligibility, or have questions about purchasing with a Spouse!

Filed Under: VA Mortgage Loans Tagged With: ft bragg, relocation to bragg, VA Mortgage Loan, va mortgage loans, veterans

Used Eligibility Once VA Mortgage Loan

March 28, 2011 by Eleanor Leave a Comment

You need to either:

pay off your prior VA loan
and disposed of the property, you can have your used eligibility restored for additional use. Also, on a one-time only basis, you may have your eligibility restored if your prior VA loan has been paid in full but you still own the property. In either case, to obtain restoration of eligibility, the veteran must send a completed VA Form 26-1880 to the local VA Center. In NC the Eligibility Center is in Winston Salem. We suggest that Veterans include evidence that the previous loan is paid in full with a notice from the bank, and a copy of your HUD-1 Settlement Statement. Including this information will speed up the process, and you will avoid delays.

If you allowed the folks who purchased your home to assume your VA loan, you can still get the Eligibility Reinstated, if the person who assumed the loan is also an eligible veteran who is willing to substitute his or her available eligibility for yours. Otherwise, the Veteran cannot have eligibility restored until the assumer has paid off the VA loan.

If you allowed someone to assume the VA Home Loan, and they defaulted, or the Federal government lost money AT ALL, you will not have your VA Eligibility restored. Even if it’s not your fault, and the VA does not hold you responsible. Additionally, if you short sold your home, or did a deed in lieu, the VA will not reinstate your Eligibility. Although you might be released from liability on the loan and/or the debt was waived, the VA will not restore the Eligibility.

The law does not permit the used portion of the veteran’s eligibility to be restored until the loss has been repaid in full.

If you are considering a home purchase in NC, and have questions about your Eligibility – please call Steve Thorne 919-649-5057, NC’s VA Mortgage Expert! Remember, Veteran’s who have been deployed still qualify for the $8000 Tax Credit! If you want to know VA Home Loan Qualifying basics, click here.

Filed Under: VA Mortgage Loans Tagged With: certificate of eligibility, reinstate va eligibility, restore va eligibility, va home loans, VA Mortgage Loan, va mortgage loans, veterans

Surviving Spouse VA Mortgage Loan

March 12, 2011 by Eleanor Leave a Comment

If you or your spouse are Veterans, or Active Servicemen, you might qualify for a 100%, no downpayment mortgage loan that is insured by the Veteran’s Administration. There are three sets of VA loan eligibility categories, all of which differ based on circumstances including the dates of service and what type of military service is on record. These are important details, because if you are the Surviving Spouse of a Veteran, you might qualify for this mortgage loan program.

Categories A and B cover veterans, while Category C lists VA loan eligibility criteria for surviving spouses of veterans who died as a result of military service. Eligible surviving spouses may only apply for a VA loan certificate of eligibility by mail, using VA form 26-1817. Those who can’t print the form or find a copy may call 1-888-244-6711 to request a paper copy of the form. (Veterans in categories A and B may apply by mail or electronically.)

The Veteran’s Administration made this as simple as possible, and when we’ve spoken to them, they’ve been very helpful to answer questions. Surviving spouses of veterans who died while in military service don’t need to submit any additional documentation apart from VA form 26-1817– if the spouse is receiving Dependency and Indemnity Compensation (DIC).

Those who don’t yet receive this benefit must submit the following paperwork along with VA form 26-1817:

A copy (no originals) of the DD Form 1300 (Report of Casualty)
A copy of the marriage certificate
A signed statement saying the surviving spouse would like to apply for Dependency and Indemnity Compensation (DIC)

The Department of Veterans Affairs official state states, “If you qualify for the home loan benefit, you probably qualify for monthly payments under DIC.” Our underwriters count this DIC income in qualifying you for the mortgage loan. You will have to provide evidence that you’ve received at least one payment prior to closing.

For surviving spouses of military members who died after military service ended, the VA requires:

A copy (no originals) of the veteran’s DD Form 214
A copy of the veteran’s death certificate
A copy of the marriage certificate

The VA official site also adds, “If your veteran spouse died after service, VA must determine that the death was due to a service-connected disability.” So, if the Veteran died of NON service related reasons… this program is not available to you. The process for reviewing this non service related application can take quite a while. We’ve known it to take up to three months for the VA to process the paperwork, but if the decision has already been made that it was a service-connected death, it zips right through.

Surviving spouses should mail VA form 26-1817 and any supporting documentation required by the VA to:

VA Loan Eligibility Center
PO Box 20729
Winston-Salem, NC 27120

As a reminder, we’ve found that if you write the veteran’s Social Security number on the top of all documents, it speeds the process up some. VA Mortgage loans are a huge Benefit for Veterans. These loans are much better (read cheaper) than FHA loans, they don’t have any monthly mortgage insurance, and the qualifying credit requirements are pretty flexible.

If you are a surviving spouse, and believe you might qualify for this mortgage loan – please call Steve and Eleanor Thorne, 919-649-5058. We do a TON of these loans, we know the guidelines, and we have the LOWEST VA Home LOAN RATES!

Filed Under: VA Mortgage Loans Tagged With: home loan for surviving spouse, surviving spouse va mortgage, VA home loan, veteran's surviving spouse mortgage