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When a person has served in the military and wants to buy a home, the first thing they should look at is a VA home loan. This loan gives a buyer an opportunity to buy a home without any down money. It is possible that they may not need to pay mortgage insurance every month. There may be limits on closing costs paid by the buyer. And an appraisal detailing the value of the property can also be provided.
How much time is required?
It can be difficult to answer this question with any degree of accuracy. Most VA loans can be closed within 45 days. This is common in the mortgage industry. The approval process consists of several steps and getting pre-approved is one way to reduce closing time. Pre-approval means that an individual has met the lender’s basic requirements for a loan before starting the process. The timing of a seller’s move-in and a buyer’s move-in can affect closing times. Even agreeing on a moving date can make the process longer or shorter. The VA rating also plays a role. If the appraiser gives a loan based on needed repairs, the closing date can be extended by weeks and sometimes months. After evaluation, the VA loan must go through the underwriting process. This is the last step. The last date can be extended for need of more documents or to resolve eligibility issues.
How much income do I need to make to be approved?
When someone applies for a VA home loan, they will hear about a formula called the debt-to-income ratio (DTI). DTI takes the VA loan applicant’s monthly loan payments and compares them to their gross monthly income. A lender will focus on monthly loans such as housing costs, unsecured loans and more. The benchmark DTI ratio for VA loans is approximately 41 percent. When it is higher, the lender may require additional financial information. If a person has a higher percentage of debt compared to their income, they should not give up. Some lenders will offer VA loans with a higher DTI ratio.
How long do I need to be on active duty to get a VA loan?
The first step in applying for a VA loan is to complete and submit VA Form 26-1880. This is for requesting certificate of eligibility. This certificate is awarded by the Veteran’s Administration. This is proof that a person is eligible for a VA loan. It does not guarantee that an individual will be approved for the loan. Required on active duty is determined by the length of time a person was in the military. A person who served in the Gulf War must have completed 24 months of continuous active duty or at least 90 days and received other than a dishonorable discharge. A person will qualify if they have served for less than 90 days during this time but have a service connected disability. To find out the specific service requirements for a VA loan, contact the Veterans Administration.
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