All About VA Home Loans

 VA loans for homes are the number one choice for veterans when they’re ready to buy. This type of mortgage typically has lower interest rates than other programs and is partially backed by the Department of Veterans Affairs. Plus, as many vets know – you can get into a loan with zero down. Low interest and zero down is a great way to say thank you to our United States veterans. The professionals at Total Lending Concepts are experts at VA loans and get them done smoothly and quickly. Read on to find out more about how to take advantage of this benefit. 

What is a VA Loan?

A VA mortgage loan is funding for your primary residence. The type of real estate you can buy is pretty flexible. In fact, it’s a little more flexible than FHA loans. With this loan program, you can purchase a single-family home, condominium, multi-unit property, manufactured home, or new construction. You cannot buy vacant land alone, though. 

A borrower can’t use their VA benefits to purchase rental properties unless they live in one of the units as their primary residence. In that case, they can buy a duplex, triplex, or a fourplex.  

If you sell your home and pay off the loan, you can get another VA mortgage. And, although this is a government-backed loan, you get the mortgage from a private lender like Total Lending Concepts. 

VA Loan Requirements

The first thing you’ll need to show your loan originator is your proof of service. You can do this with a COE – Certificate of Eligibility. 

Then like any loan, we’ll take a full application, pull your credit, and collect documents. Even though it’s a VA loan, there still are other requirements like: 

Debt-to-Income (DTI) – The DTI is how much debt (housing, car, credit cards) you have compared to your income. Here’s how it works:

• Your gross income is $6,000 a month 
• Debts are $1,500 a month and include $300 car payment, $1000 on your new mortgage and $200 on credit cards. 
• Divide the $1,500 of debts by your gross monthly income of $6,000 gross monthly income for a DTI ratio of 25%.
• 41% is about the maximum debt-to-income for a VA loan, but in some instances, you can go a bit higher.

Credit Score – Generally, you’ll need a score of 620 or higher. If your score isn’t that high, talk to your loan officer at Total Lending Concepts. They will be able to tell you what you can do to improve your score, so you can buy the home you’ve been hoping for. 

VA Down Payment

Most veterans can get into a loan with no money down. 0% – you can’t beat that! One thing to keep in mind though is that there is a funding fee. 

VA Funding Fee – if this is your first VA loan, and you’re not putting any money down, you’ll have a fee of 2.15% of the amount of the loan. If you put 10% or more down, your funding fee would only be 1.25%. If you’ve had a VA loan before, you will pay 3.3% of the loan amount for a funding fee. 

VA Interest Rates

Rates – As they should be, VA interest rates are about 0.25% lower than conventional loans. That is because since the VA partially guarantees the loan, it’s less risky for lenders. Less risk for lenders means lower rates for borrowers. 

Add to that the fact that veterans take their financial responsibility seriously, and have an extremely low foreclosure rate. 

Private Mortgage Insurance – unlike other 0% down loans like FHA, VA loans don’t require private mortgage insurance (PMI). That can save you hundreds of dollars per month. So if you’re a veteran, you probably can’t beat a VA loan. 

Ready to get your VA home loan from Total Lending Concepts? Contact us today. We’re here to help our veterans.