Veteran Death Benefits and VA Home Loan Eligibility

April 26, 2013 by Leave a Comment

VA Home Loan BenefitsIf you are in the unfortunate position of looking for what Death Benefits are covered by the VA – we are sorry. We’re here to help, but so sorry for your loss and that you are in this position.  Here you’ll find information about Veteran Death Benefits and VA Home Loan Eligibility:

As part of the VA Death Benefits package, when a Veteran dies, the surviving spouse may be entitled to certain VA death benefits, including certain VA home loan benefits, any SGLI life insurance arrangement, military burial honors, disabled service member benefits and death pensions for war veterans.

Surviving spouses are eligible for VA home loans when, according to the VA, the veteran died on active duty or as a result of service-related disabilities. In the case of death on active duty, there’s no question as to the status of the veteran, but for “service-related disabilities” there are verification procedures which may be required. (here’s some more detailed on Surviving Spouse of a Disabled Veteran)  Additionally, in NC unfortunately, Common Law marriage is not recognized for VA Home Loan Benefits.

The VA is clear about the fact that the “surviving spouse” will only qualify if they have not remarried. In other words, it’s only for Surviving Spouses who are unmarried. If you have remarried,
the VA extends benefits for the spouse who remarries at or beyond their 57th birthday after December 16 2003. For Surviving Spouses who have remarried, but meet the “birthday requirement,” you would also qualify for a VA Home Loan 100% no money down benefit as well. [Read more...]

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Earnest Money For VA Loans in NC

April 24, 2013 by Leave a Comment

VA Loans / Earnest Money Requirements

We get tons of questions from First Time Home Buyers on this site, and I do my very best to answer ever single one… but sometimes, I need to just pull the question out and answer it as a post, because there’s more information that I need to provide than a single line of text.  I recently had the following question that essentially addresses Earnest Money for VA Loans in NC:

I’m looking to purchase my first home using a VA loan. I have always heard that the VA loan is great because you don’t have to pay money down, but it’s recently been called to my attention that I may have to pay a percentage of fees at closing or when I put in an offer on a house? I’m just not sure what I need to be prepared for. I’d greatly appreciate any help. Thanks!

This is a great question, because VA Loan Closing Costs and prepaid items (like taxes and insurance) can cost upwards of $8000 to $10,000 depending on the sales price and what time of year you close.

Many of the homebuyers we talk to in NC are ready to pay SOME of the closing costs, but not anywhere near $10,000.  VA Loans are 100% no money down mortgage loan, so often times the Veterans we work with don’t need more than a $1000 or so to cover their portion of the costs… because the Seller Will Often pay for closing costs on a VA Loan.

However, Closing Costs can NOT be “rolled in” to a VA Loan.Likewise, a Veteran will be responsible for paying an Earnest Money Deposit, and Due Diligence fees, just like they would on other loans.  Typically Earnest money is an amount of at LEAST $500.  Per the Contract, the negotiated check is deposited with the Due Diligence fee check. In most cases, the Earnest Money is held by a Third Party (in NC that’s usually the Selling/Listing Agents Brokerage) and is credited towards the home buyer’s down payment and/or closing costs. Remember that once the contract is agreed upon, the check is actually cashed, so be sure your funds are available. [Read more...]

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Buying a House With A VA Loan When it has Tax Liens

March 20, 2013 by Leave a Comment

There are Great Options for Veterans!

Veteran’s who are looking for a home that is a DEAL, might be considering homes that have (or are) distressed properties.  Homes that were recently foreclosed upon or are short sales can come with some additional concerns.

Does the Veteran get stuck with the seller’s debts and liens if they purchase a short sale?  The short answer is; No. The mortgages, liens and judgements do not generally stay with the house.

Buyers and sometimes their Realtors get concerned that a house in foreclosure may have debts attached to it that will survive the closing of the short sale. Buyers are concerned that they will “inherit” the seller’s debt.

Here are the safeguards against that happening:

  1. Title search
  2. Negotiation with lien-holders to release the liens from the property
  3. Closing attorneys confirm clear title before they administer the transfer
  4. Title insurance in case of errors in the title clearing process

It’s also very  important to remember that the VA Loan program underwriting is slanted to PROTECT the Veteran.  Because of this, VA Loan underwriting has stricter appraisal requirements regarding a home’s condition than conventional lending programs do.  With a Short Sale, in particular, this is an important fact because  ”short-sale sellers” are generally  typically have no motivation (or money) to make repairs, and many of these homes need improvements and updates.  That’s why the VA appraisal requirements are so strict on Short Sale Transactions. [Read more...]

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Maximum VA Loan Limits in NC

January 16, 2013 by Leave a Comment

va loansVeteran’s who want to purchase a home using the VA Loan program must calculate the amount they can borrow based upon the “Guarantee” available to them on their Certificate of Eligibility.  They must also consider the maximum VA Loan Limit for their County.

The Veterans Administration (VA) will guarantee the lesser of 25 percent of the county loan limit or 25 percent of the loan amount for veteran with full entitlement.  See the North Carolina County Limits below for each county. You will note that in NC the County limit is $417,000 up to $1,000,000.

A Certificate with “Full” entitlement is for $36,000.  A quarter of $417,000 is $104,250. In order to meet that mark, the VA essentially created a secondary entitlement amount ($104,250 – 36,000 = $68,250). That additional layer of entitlement comes into play anytime a veteran purchases a home for more than $144,000.

More info: VA Jumbo Loans above the $417,000 conforming loan amount.

Thank you for your service!  If you have questions about VA Loans and your VA Benefits, call Steve and Eleanor Thorne 919 649 5058 Connect with us on Facebook!

[Read more...]

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VA Home Loans for Rural Areas

January 11, 2013 by Leave a Comment
VA Mortgage Loans have No Downpayment

VA Mortgage Loans have No Downpayment

Many of the Veteran’s we speak with are glad to be getting out of the Service, and they are most interested in living in a more “rural” setting… After serving and living in tight quarters, we totally understand the desire to look at some of NC’s communities that, for the most part, do not consist of cookie cutter subdivisions with extra Homeowner Dues.

If this is important to you – remember that your VA Home loan Benefits work in this type of Rural setting.  Here are some points we think you should consider:

  • Driveway Access:  The VA will require that you have deeded right away to the driveway.  If you are sharing a drive with someone, you will need a recorded driveway agreement (who is going to maintain it and how).
  • Well and Septic:  USDA and FHA no longer require a Well and Septic Inspection unless the appraiser notes that there might be a problem.  Recently, we’ve had VA Loan Underwriters ask for a Well and Septic inspection on every property. [Read more...]
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What VA Loan Appraisers Are Looking For

January 9, 2013 by Leave a Comment

using va loans to buy distressed homesThe VA Loan Process is a little different than other loan programs.  One major reason is that the VA still requires a lender to use a Veteran Association approved Appraiser.  The Appraisers are generally very “experienced” and their revenue is set according to the VA – not what the “market” in that area pay for an appraiser, or what the Bank is willing to pay.

The instructions to the VA Appraiser is fairly limited – the VA simply requires the property to be in a livable condition. This “livable” requirement is unique to VA loans.

Does it mean that the VA is making it easier for Vets to purchase distressed property?  Ugh, no.  Although, VA Loans can also be used to purchase foreclosures, Short Sales and Bank Owned homes too!

The vagueness of the term “livable” can unfortunately add some concern for first time home buyers and sellers because they are not sure what repairs might be flagged by the appraiser as needing to be fixed as they negotiate the contract.

The VA Lenders Guide has an entire chapter dedicated to Minimum Property Requirements, but it is actually a very short chapter and most of the details do not apply to 90% of homes. Instead, there is a catch-all paragraph at the beginning that nearly all repairs are generated from. That requirement is for a home to be Safe, Sound, and Sanitary. [Read more...]

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Can You Get A VA Loan More Than Once?

December 24, 2012 by Leave a Comment

VA_Loan for more than one homeNorth Carolina Veterans may be eligible to purchase a new home with no downpayment (using their VA loan eligibility) and not even realize it!  We try to ALWAYS ask a potential borrower if they are eligible for a VA Loan, and we are constantly surprised when people say, “Well, I served in the Gulf,” but don’t realize that this might qualify them for a VA Loan with no downpayment!

Another group of people we talk to will say, “Well, we used our VA Loan to buy a house in San Antonio.”  Okay… did you SELL that house in San Antonio?  If so, you can probably use your VA Benefits to get another VA Loan in Raleigh (or Charlotte, or Asheville – you get the picture).  More good news?  If you still own that house in San Antonio (for instance) you might STILL qualify to use your VA Loan benefits here in NC!

Many Veteran’s don’t realize that there is actually no limit on the number of VA Guaranteed Home Loans a veteran can receive, and this answer often surprises veteran borrowers who have used the program before.  In reality, a Veteran may qualify (in some cases) to borrow for a home using VA Loan benefits for a Second Home. [Read more...]

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Buying a Short Sale Home With a VA Loan

December 6, 2012 by Leave a Comment

get married - buy a houseAlthough they have not been as available (thankfully) this year as in years past – there are still some really good deals available on homes where  the Owner is underwater.  You CAN use your VA Loan benefits to purchase a Short Sale Home.

Those transactions are called “Short Sales” and while it’s true it can be a longer process (because the Seller and the Bank have to agree on everything), they can still be a cheaper way to get a home… and Yes, short sales are eligible for VA-backed financing,  VA Loans can also be used for foreclosures and Bank Owned homes too!

How To Buy A Short Sale Home With VA Loan Benefits

It’s important to remember that the VA Loan program underwriting is slanted to PROTECT the Veteran.  Because of this, VA Loan underwriting has stricter appraisal requirements regarding a home’s condition than conventional lending programs do.  With a Short Sale, in particular, this is an important fact because  ”short-sale sellers” are generally  typically have no motivation (or money) to make repairs, and many of these homes need improvements and updates.

VA Loan Underwriting Guideline Questions?? 

[Read more...]

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VA Loan Mortgage Credit Certificate

November 2, 2012 by Leave a Comment

moving to Raleigh?Mortgage Credit Certificates (MCCs) issued through NC Housing  may qualify a Veteran for a Federal tax credit.  The Federal tax credit is based on a certain percentage of the Veteran’s mortgage interest payment.

The Veteran’s Tax credit with the MCC is limited.  If the percentage on the MCC is more than 20 percent, there is an annual limit on the tax credit equal to the lesser of $2,000 or the borrower’s maximum tax liability.

VA Loan Mortgage Credit Certificate

Example:  The Veteran’s taxes show that they are being taxed at a rate of 30-percent, and the loan is $100,000.  The borrower will pay approximately $4,000 in annual mortgage interest, if the mortgage rate is 4.0% .  Let’s say that the Veteran’s  estimated total Federal income tax liability is $9,000.  Calculate the tax credit as follows: [Read more...]

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NC Definition of First Time Home Buyer

October 25, 2012 by 1 Comment

nchfa loan programsWe have some great first time homebuyer programs in NC!  One of our favorite programs allows for credit scores of 600, another program provides a downpayment assistance program of $8000!

To qualify for the First Time Home Buyer Program in NC, however, you don’t really have to be a First Time HomeBuyer!  That’s right!

NC Definition of First Time Home Buyer

Even if you are not buying your first home, you may still qualify for the low-interest FirstHome Mortgage, downpayment assistance, or a Mortgage Credit Certificate if you meet one of the following conditions:

  • You have not owned a home as your principal residence in the past three years.
  • You are a veteran (defined as a person who served in active duty of the United States Armed Forces or Reserves and who was honorably discharged or released) in the last 25 years. [Read more...]
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