VA Mortgage Loans

VA Refinance On Investment Property

May 16, 2013 by Leave a Comment

VA Refinance of Investment PropertyWe get tons of questions from folks who have moved to North Carolina from another area, becoming landlords in the process.  Maybe you bought a home in Jacksonville, NC and now that you are out of the service, you are living in Charlotte. If you still have that home in Jacksonville, and you are renting it out, can you do a VA Refinance on Investment property?  What about buying a new house?  Can you use your VA Eligibility to purchase a second home?

VA Streamline Refinance Options For Investment Property

In order to qualify for a VA Interest Rate Reduction Refinance, you must certify that you previously occupied the home that you are refinancing with a VA streamline. Some investors will not do these loans if the Veteran is not currently living in the home – so the trick is to find one that will.

Our company WILL allow you to qualify for a VA Streamline Refinance if you don’t live in the home. For example, if you lived in the home, then relocated and rented it out, you still may be able to apply for a VA streamline refinance. [Read more...]

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VA Condo Approvals in North Carolina

May 9, 2013 by Leave a Comment

veteran_incentive_to_buy_a_homeThe North Carolina VA Loan Approved Condominium List And Homeowner Association Approval Process:

Thank you for your Service!  In North Carolina we are fortunate to have so many bases, and with them – thousands of Service Members. VA Home Loans are one of our favorite Mortgage Programs, not because they are easy to do, they are not, but because it is a way for us to give back to the men and women that have bravely served or country.  It surprises us that many Veterans “neglect” to tell their loan officer that they served – because this is one of the best benefits you keep from your Service!

Many of the younger Veterans have limited income, as most younger Borrowers do, so they often start off purchasing a condominium as their first property.  Additionally, the renewed interest by First Time Homebuyers to live in a more “walkable” urban area means that condos in NC are a very good investment.  This means that in order for a Veteran to be able to use their Veterans Eligibility Benefit towards the purchase of a condo, the condo needs to be on the VA Approved Condo List, just like condo’s have to be on a FHA Approved Condo List for folks who want to purchase a condo with a FHA Mortgage.

While Realtors that work with Veteran’s on a regular bases are aware of this, most other Realtors as well as some Loan Originators are not.  The VA and FHA Approved Condo Eligibility Program was historically very similar in North Carolina.  However, the approved Condo project list in NC for VA Loans looks very different from the approved projects on the FHA List.  FHA changed the guidelines in 2010 for condo project approval in NC, and they now must re-certify that they meet the guidelines every two years.  After 2011, many condo projects in NC never submitted their updated paperwork. [Read more...]

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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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VA Home Loan Ratio Requirements

April 25, 2013 by Leave a Comment
VA Home Loan Requirements

VA Home Loan Requirements

We get tons of questions from Veteran’s who want to know what the “ratios” are that a VA Underwriter sues to qualify them for a mortgage loan.  It unfortunately, depends… The VA Home Loan Ratio Requirements are based upon income – and that’s where it can get tricky. What income is used to qualify the Veteran in NC?

“I am reading conflicting information online about front/back end ratios on VA loans. I’m trying to figure out how much home we can qualify for and need an accurate ratio to get an idea . Can somebody explain to me how these loans are calculated?”

VA uses two methods. The first is single ratio, which is a guideline of 41% for all monthly debt. (no such thing as front ratio in VA, although almost every lenders’ computers default with two ratios, anyway).  We use Automated underwriting for VA Loans – and this means the “computers” at Freddie Mac do most of the initial reviews.  We’ve seen many Veterans get approved with 44 and 45% ratios for total debt.

The second method is the residual calculation. This type of calculation is not as widely used in NC.  The Veteran Underwriter is asked to take the Vet’s allowable household total gross monthly income, then subtract out Federal, State and SS taxes, including Medicare. Then the underwriter subtracts all monthly debt, the total housing payment, estimated utilities and maintenance (there’s a form that the VA provides). That remaining number is the Veteran’s residual income. Every area of the country has it’s own required residual, depending upon family size. [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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Income Sources: Qualifying for a VA Loan

March 19, 2013 by Leave a Comment

va loansYou don’t necessarily need to be employed to qualify for a VA home loan.  We can count retirement income for Veterans, child support and Alimony can also be used to qualify for a VA mortgage loan too.  The important thing to remember when you are looking at Income Sources Qualifying for a VA Loan is this… we need Stable Employment that we can DOCUMENT.

If you are currently working as a Fireman, and a Painter that is AWESOME.  If you are not claiming all of your income as a Painter, then we will not be able to use that income to qualify you for a VA loan.  Ditto, if you write off all of your income as a Painter.

Qualified Income and VA Loans

Unfortunately, when you are applying for a VA loan, not all forms of employment are considered equal.

In the best of all possible worlds, you’ve been working the same job, either as a Veteran, or after you leave the military, for at least the last two years. That’s the kind of stable, reliable employment and income stream that VA Underwriters appreciate. Of course, that stability doesn’t guarantee you’ll get a loan, but it certainly doesn’t hurt as you begin the process.

The problem for many people, especially during this slow-moving economic recovery, is that you may not have been at your current job for least two years. And what about the hundreds upon hundreds of military members who separate from the service every year? Clearly they’re not going to have two years of steady employment upon hitting the civilian job market. [Read more...]

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Can You “Roll In” Closing Costs on A VA Loan?

March 9, 2013 by Leave a Comment

VA Loans in NCIf you a Veteran who wants to purchase a Foreclosure or Short Sale, be prepared that very few of the Banks will pay closing costs.  Because of this, we often have Veteran’s who want to know if they can “roll in their VA Loan closing costs” – meaning add it to their mortgage loan, as an addition.

This is understandable, since 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 Seller’s will often pay the closing cost. [Read more...]

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Child Support and Qualifying for a VA Loan

March 8, 2013 by Leave a Comment

veteran_incentive_to_buy_a_homeIf you are Veteran who is  RECEIVING Child Support there are some important points to consider when applying for a mortgage loan.  A VA Loan requires that income used to qualify you for a home in NC include income that is “stable, reliable, and likely to continue.”  Unfortunately, for some Veterans, this can be kinda sticky when it comes to their Child Support payments. Child Support and qualifying for a VA Loan is pretty easy, if the payments are being made on time!

For Child Support payments to count towards qualifying for a VA Loan, it needs to have been received for at least 12 months.  So, if you just got separated  you’ll need to wait until you’ve received payments for 12 months before we can count that income.  If you don’t need this income to qualify VA loan underwriting requirements don’t force the borrower to list such payments as income.

Why wouldn’t someone list it as income?  Well, we have to verify that the payments have been received consistently and on time.  If you receive this income sporadically, or we can’t DOCUMENT the income – it won’t be counted.

In most cases you’ll need a court order or other official documents showing the payments are required.  A parent who is contributing to the Child’s Support without the Court ordering it probably won’t count.  This type of Child support and alimony can’t be counted as income as part of informal agreements or a “verbal contract”.  (More information on Single Parents Qualifying for a home in NC) [Read more...]

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Calculating Partial Entitlement on Veteran Home Loans

January 22, 2013 by Leave a Comment

va home loanVA Loan benefits include a 100% no money down loan for the purchase of a home.  There are several ways to decide if you can use those VA Loan benefits to purchase your next home.  The Veteran’s Administration provides you with a Certificate of Eligibility.  A “full” certificate will have an amount of $36,000.  It’s a green form, approximately 8 x 11.  If you’ve used your Eligibility, the Certificate should be sent to the Veteran’s Administration, and they will write on the Certificate the amount you have left.

If you previously purchased a home using your VA Benefits then you might still have some of that “Entitlement” available to you for the purchase a new home!  To Calculate Maximum Entitlement available, consider the following:

  • If your previous home was purchased using a VA Loan, and that loan was paid off by the folks you sold the house to, the full entitlement may have been restored.
  • If you sold your home to someone, and allowed them to ASSUME your VA Loan, then you might have the full entitlement restored, if one or more of the purchasers were also Veterans.
  • If you still own the home, and you are renting it out – you might be able to purchase a new home using your partial entitlement, but there are several restrictions [Read more...]
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