Equity Resources, Inc. is offering Veterans and Active Military a FREE APPRAISAL on a home purchase or refinance for the month of November 2017! The Free Appraisal is valid for Veterans or active military members who apply 11/1/17 – 12/1/17 and close before 1/5/18 with Equity Resources, Inc. Our Home Loans For Veterans Program allows us to approve Veterans with Automated Systems, with credit down to around 620, but it also allows us to use Manual Underwriting when we have offsetting or compensating factors down to 580.
In addition, Equity Resources, Inc. will be adding a pricing incentive to any VA loan with a conforming loan amount locked before November 30, 2017. The borrower benefit is a LOWER RATE.
Home Loans For Veterans Guideline Requirements
VA funding fee can be added to 100% financing.
VA has no monthly PMI or mortgage insurance. All mortgage products that have less than a 20% down payment have some sort of “Mortgage Insurance.” I call it “Default Insurance,” because it really benefits the bank – in the event of foreclosure, the bank gets a small amount of money to cover some of their costs (It’s not a policy that pays the mortgage off in the event of death).
- A basic funding fee of 2.15 percent must be paid to VA by all but certain exempt veterans. A down payment of 5 percent or more will reduce the fee to 1.5 percent and a 10 percent down payment will reduce it to 1.25 percent.
- A funding fee of 2.40 percent must be paid by all eligible Reserve/National Guard individuals. A down payment of 5 percent or more will reduce the fee to 1.75 percent and a 10 percent down payment will reduce it to 1.50 percent.
- The funding fee for loans to refinance an existing VA home loan with a new VA home loan to lower the existing interest rate is 0.5 percent.
- Veterans who are using entitlement for a second or subsequent time who do not make a down payment of at least 5 percent are charged a funding fee of 3.3 percent. A down payment of 5 percent or more will reduce the fee to 1.50 percent and a 10 percent down payment will reduce it to 1.25 percent.
- Veterans who are classified by the VA as disabled will have a percent (down to zero) of their fee waived.
A COE (Certificate of Eligibility) is required for all purchase and cash-out refinance transactions. We have access to the Web LGY system. This online (web based) system can issue an online Certificate of Eligibility in a matter of seconds for Home Loans For Veterans. It is important to understand that in situations where you recently changed status, married a fellow service member, or other unusual circumstances, your case may not be eligible to be processed through the web. In that case, we will submit the VA Form 26-1880 (request for Certificate of Eligibility) directly to the VA, with your Proof of Service.
VA allows 100% financing up to the annual conforming county loan limits, meaning it changes from county to county. Most Conforming limits for the Home Loans for Veterans in NC is $424,100. However, it is a huge advantage for folks who want to use their Home Loans for Veteran Benefits for a Jumbo Loan.
When a Veteran has already used basic entitlement for a primary home purchase, if they decide to purchase a new primary residence, they may have bonus entitlement available. More good news is that there is a provision that allows you to own two homes, and still be able to use the Home Loans For Veterans program. For example, if you are stationed at Fort Sam Houston and you buy a house in San Antonio, and then you are deployed… and your spouse wants to live near family in NC. In that situation, we can probably use your benefits to purchase the home in NC. We must prove a “net tangible benefit” and your Spouse must live in the home for at least 6 months out of the year.
The seller can pay for all closing costs, i.e.—appraisal, recording fees and taxes, title work, origination fee, etc. Despite the obvious misconception, Closing Costs on a VA loan can NOT be financed. The VA allows for the seller or lender can pay the closing costs but they certainly can not be financed on a purchase transaction. Only the funding fee (the upfront PMI charged by the VA) can be financed. HOWEVER, the State of North Carolina does offer a closing costs assistance Grant, of up to 3% of the Loan Amount, for qualifying Veterans.
The seller may also provide 4% seller concessions. Seller concessions are anything of value added to the transaction by the builder or seller for which the buyer pays nothing additional and which the seller is not customarily expected or required to pay or provide. Examples of seller concessions: Personal property in purchase contract (flat screen TV), seller pays the Veteran’s VA funding fee, seller prepays Veteran’s property taxes and insurance.
The Veteran may not pay for the Pest inspection on a purchase. Veterans can NOT pay for Commitment Fees, Underwriting Fees, Processing Fees – or the like. If a Lender also charges for Tax Service Fees, those would be charged to the Seller.
For a VA cash-out refinance, there must currently be a lien on the property. VA Debt Consolidation is another way to do a Cash-out Refinance: Credit card debt, car loans, and home equity lines of credit can all carry high interest rates and make it difficult to manage your monthly payments. Veterans can consolidate these expensive obligations and combine them into one low fixed rate loan with a VA debt consolidation refinance.
The Veteran must certify that they intend to occupy the property within 60 days of Closing. If active-duty military and stationed elsewhere (i.e.-overseas or in a different state), the Veteran must occupy the home within 12 months. Note: A spouse, caretaker or a Veteran’s attorney-in fact of a Veteran’s child(ren) may fulfill the occupancy requirement as long as the Veteran will eventually reside in the home. Let’s say you are on active duty, and you have Combat Orders – your family, remaining Stateside, near the base you will be returning to, could occupy the property. In a situation where you are leaving active duty, and retiring from the Force, there is also some leeway.
Non-taxable income may be grossed up for purposes of calculating the DTI ratio, however, it cannot be used when figuring residual income.
When a Well is present, a bacteria water test is required. The quick answer is that we often make VA loans on homes that are generally in more rural North Carolina settings, and have wells, septic tanks and other non-public features. The list of VA Minimum Property Requirements includes a section that specifically addresses how the appraiser is to view these items, and what inspections we are required to get. Chapter 12 of VA Pamphlet 26-7 states, “Connection to a public or community water/sewage disposal system is required whenever feasible.” The phrase “wherever feasible is the key here, and is up for some interpretation…
Home Loans For Veterans Program Compensating Factors
We are allowed to go below the typical 620 credit scores, or sometimes exceed the Debt to Income ratios on the special Home Loans For Veterans Program when we can show two or more of the following:
Excellent long term credit
Conservative use of consumer debt
Minimal consumer debt
Long term employment
Significant assets or down payment
High residual income
Home Loans For Veterans Derogatory Credit Seasoning Requirements
Foreclosure: 2 Years from date of Transfer. This can often be more than 24 months from the date of the court order, as some banks take several weeks (or months) to actually transfer the property.
Bankruptcy Chapter 7: 2 Years
Bankruptcy Chapter 13: If the applicant has finished making all payments satisfactorily, the lender may conclude that the applicant has reestablished satisfactory credit. We have RARELY seen many of these loans work with less than 12 months from the event. The critical piece is to establish new credit quickly. Revolving credit generally raises scores faster than installment debt.
If you have questions about Home Loans For Veterans and our free appraisal for November, or if you are considering a VA Loans in Rural Communities, and want to know more about Construction Loans, please call Steve and Eleanor Thorne, Government Mortgage Loan Experts, 919-649-5058