VA Loan Requirements
VA home loans come at very attractive interest rates exclusively to the U.S. army personnel. These loans are not sanctioned by the government but enjoy the guarantee of the U.S. government that the loan will be repaid by it if the borrower does not repay the loan amount properly.
These loans are written by the regular bankers who sanction home loans for other people also. The advantages of this VA home loan are that apart from the interest rate being low there is no need of paying anything up front or down payment money.
The another advantage is a military personnel’s bad credit rating will in no way stand in the way of getting a housing loan sanctioned. To top it all the appraisal process will be much faster than any one can imagine. No advance insurance needs to be paid and this benefit is due to the golden guarantee by the U.S. government.
$240,000 is the maximum loan sanctioned this way, but wait. Not all military personnel are eligible for this entire amount. The income level, ability to pay for the incidental expenses like taxes and insurance, ability to pay monthly installments and the past credit history will play a vital role before the banker decides upon the quantum of loan to be sanctioned.
An eligible borrower under this scheme can also opt for a floating rate of interest to enjoy the present low interest rates to the maximum. Yes, there is the possibility for the interest rate to rise in five years and this can be avoided by going in for a refinance at that time.
There is no penalty fore prepayment and the borrower can switch easily to another loan scheme without paying any penalty at all.
The veterans’ administration makes the past and the present military personnel to be eligible for this attractive home loan scheme. War veterans, retired personnel, and present soldiers of navy, air force, army and coast guard are eligible under this scheme. The U.S. marines are also eligible under this scheme.
If the marine has been killed in action then his wife qualifies for this loan. 90 days of service during war or 181 days in peace time makes a veteran eligible for this loan. National guards with a service record of 6 years are eligible to apply for this loan.
Creditworthiness is also an eligibility factor though it is not the sole criterion for deciding the eligibility of a borrower. The veteran’s administration will consider the preceding one year of your credit behavior when you apply for a VA home loan.
If a borrower has obtained many loans in the past and has a heavy commitment up on them then the application to sanction the request may well be rejected.
Minimum years of service for each cadre are fixed by the veterans administration and those who fall short of this will not be eligible for a VA home loan. It will give a certificate of eligibility for those who satisfy its requirements.