What Are The 2012 Requirements For A VA Home Loan?

First of all, thank you for your service to our country.  We appreciate you!  If you are a veteran with an honorable discharge, a surviving spouse of a veteran, or active duty member of our military, you should be eligible for a VA home loan.   VA loans allow for a Veteran to purchase or refinance his/her primary residence with $0 down payment and no monthly mortgage insurance.  A VA loan should be used by any Veteran who has earned it and has less than 20% down payment or equity.   You may be eligible for a VA-guaranteed home loan if you are in one of these four groups:

  • Veterans
  • Active duty servicemembers
  • Reservists/National Guard
  • Surviving spouses
As with any mortgage, there are many details that your mortgage adviser, realtor and title company will guide you through or take of for you.  We would like to touch on some of the key elements of  a VA mortgage…

 

The Basics

There are 3 key elements to any mortgage transaction.

  • Credit – Your credit score & history are the driving factor in today’s market.
  • Debt to Income (DTI) – This ratio determines how much of a payment you can afford under the lending guidelines.
  • Loan to Value (LTV) – This ratio determines how much you borrow against the value of the property.

 

So, what are the VA Loan Requirements for 2012?

These requirements guide a veteran borrower’s ability to repay the loan as well as the lender’s ability to lend. Whether you are buying a home or refinancing an existing home, you must know the restrictions that will allow you to make better long-term financial decisions.  

  • VA Certificate of Eligibility  –  Proving to a VA-approved lender that you are eligible for a military home loan requires a  Certificate of Eligibility (COE).  Your lender will be happy to request one for you… this is what they do! This document is required for a VA loan.

 

  • Credit Score   –  Veterans Affairs (VA) insures VA loans and does not require a minimum FICO score. However, lenders have their own requirements that are in addition to those of the VA. Most lenders today require the minimum mid-score in a tri-merge report to be at 640 or better. The credit report must clearly support an applicant’s ability to meet financial obligations in a timely, responsible manner. If you have questions about credit scoring, you can submit your question by clicking here.

 

  • Established Trade Lines  – VA loan requirements allow for both traditional and alternative credit trade lines. However, most lenders require that you must have at least two lines of credit that you have maintained for at least two years. Alternative lines of credit are defined as continuing obligations, such as cell-phone / home-phone bills, utility bills, rent history, car insurance, which require a periodic payment in order to establish payment history. To be used to establish a minimum payment history, an alternative credit trade line must have existed for at least 12 months.

If you have further questions regarding VA home loans, contact us by clicking here and we will do our best to help you!  Keep in mind requirements can change so be sure to ask your mortgage adviser what the current requirements are.

 

 

 

 

 

DISCLAIMER: Neither Indiana VA Mortgages (IndianaVAmortgages.com) nor Luminate Home Loans is affiliated with any government agencies, including the VA.