VA Mortgage Loan Miami
Definition of ‘VA Loan’
A VA mortgage loan program established by the United States Department of Veterans Affairs to help veterans and their families obtain home financing. The Department of Veterans Affairs does not directly originate VA loans; instead, they establish the rules for those who may qualify, dictate the terms of the mortgages offered and ensure VA loans against default.
VA mortgage loan offer up to 100% financing on the value of a home. To qualify for a VA loan, borrowers must present a certificate of eligibility, which establishes their record of military service, to the lender. VA mortgage loan, FHA loans and other loans insured by departments of the United States government are securitized by the Government National Mortgage Association (Ginnie Mae). These securities carry the guarantee against default of the United States government.
VA Mortgage Loan Miami
They are 100% dedicated to helping service men and women reach their goals of homeownership in Miami. For military members, the VA mortgage loan program makes owning a home possible by allowing eligible veterans and active-duty military personnel to finance 100% of a home’s value with zero money down. VA loans offer flexible home financing options, with a variety of fixed-rate and adjustable rate loans available.
VA Loan Highlights to Miami
- Guaranteed by the Department of Veteran Affairs
- Provides financing for qualified veterans, active-duty personnel, reservists, and eligible family members
- No down payment required (up to conforming limit)
- 4% seller concession allowed (i.e., VA funding fee, taxes and insurance, gifts, etc.)
- No limit on seller contributions toward closing cost
Mortgage loan companies in Miami have experience with the entire VA program. They can assist you with obtaining the required Certificate of Eligibility to help ensure a timely closing and answer any questions you may have about the home buying process.
Demand has increased in recent years for Veterans Affairs mortgages in Miami, known as VA loans. These mortgages do not always require a down payment and are available to veterans and active military members. VA loans are made through private lenders and are guaranteed by the Department of Veterans Affairs, so they do not require mortgage insurance. There’s no minimum credit score requirement.
The VA loan remains one of the few mortgage options for borrowers who don’t have down payments. Available to millions of veterans and active military members, VA loans are somewhat easier to qualify for than conventional mortgages.
The U.S. Department of Veterans Affairs is not a direct lender. The loan is made through a private lender and partially guaranteed by the VA, as long as guidelines are met.
If you think you may be eligible for a VA loan, here are some must-knows about the program.
Most members of the military, veterans, reservists and National Guard members are eligible to apply for a VA loan. Spouses of military members who died while on active duty or as a result of a service-connected disability may also apply.
Active-duty members generally qualify after about 6 months of service. Reservists and members of the National Guard must wait 6 years to apply, but if they are called to active duty before that, they gain eligibility after 181 days of service.
“Most reservists are qualifying under an active duty,” says Michael Frueh, loan guaranty director for the Department of Veterans Affairs.
Reservists, members of the National Guard and active-duty members generally are eligible after 90 days of service during war periods.
“If you were on any type of foreign soil, more than likely you are eligible,” says Grant Moon, a veteran, and president of VA Loan Captain Inc., a loan referral company.
Potential borrowers must obtain a certificate of eligibility. The form can be submitted online.
“But you don’t need the Certificate of Eligibility in hand to start the mortgage process,” says Chris Birk, director of education for Veterans United Home Loans. “Lenders in many cases can get this document for borrowers during the pre approval phase.”
Advantages of a VA loan
Loans guaranteed by the VA can be obtained without any down payment.
“That’s a huge plus,” Frueh says.
Another plus: A VA loan doesn’t require mortgage insurance, as do Federal Housing Administration and conventional loans with less than a 20% down payment. The benefit translates into significant monthly savings for VA borrowers. For instance, a borrower who makes a 3.5% down payment on a $200,000 FHA-insured mortgage pays $142 a month for mortgage insurance alone.
“And with a VA loan, you don’t have to save all the money you would have to save for a conventional loan,” Moon says.
Although the costs of getting a VA loan are generally lower than other types of low down payment mortgages, they still carry a one-time funding fee that varies, depending on the amount of the down payment and the type of veteran.
A borrower in the armed forces getting a VA loan for the first time, with zero down payment, would pay a fee of 2.15% of the loan amount, Frueh says. The fee is reduced to 1.25% of the loan amount if the borrower makes a 10% down payment. Reservists and National Guard members normally pay about a quarter of a percentage point more in fees than active-duty members pay.
Those using the VA loan program for the second time, without a down payment, would pay 3.3% of the total loan amount.
“And if you receive disability compensation, the fee is waived,” Frueh says.
Underwriting requirements Miami
Veterans Affairs does not require a minimum credit score for a VA loan, but lenders generally have their own internal requirements. Most lenders ask for a credit score of 620 or higher, Moon says.
“There are players that would go lower, but they would probably charge a higher interest rate,” he says.
Borrowers must show sufficient income to repay the loan and shouldn’t have excessive debt, but the guidelines are usually more flexible than they are for conventional loans.
“We always tell underwriters to do their due diligence, but this is a benefits program, so there is some flexibility,” Frueh says.
VA guidelines allow veterans to use their home-loan benefits a year or two after bankruptcy or foreclosure.
“We look at the whole credit picture, what was the reason for the credit bankruptcy and where the borrower is now,” says John Bell, assistant director of loan policy at the VA.
VA loans are available only to finance a primary home. A VA loan cannot be used to purchase or refinance vacation and investment homes.
The limit on VA loans vary by county, but it’s $417,000 in most parts of the country and up to $625,500 in high-cost areas in the continental United States and even higher in 4 counties in Hawaii.
What if I stop paying the mortgage?
Another advantage of a VA loan is the assistance offered to struggle borrowers. If the borrower of a VA loan can’t make payments on the mortgage, the VA can negotiate with the lender on behalf of the borrower.
“We have dedicated staff nationwide committed to helping veterans who are experiencing financial difficulty,” Bell says.
VA’s financial counselors can help borrowers negotiate repayment plans, loan modifications and other alternatives to foreclosure, he says.