As a mortgage company, there's no greater honor for us than helping a veteran purchase a home
VA loans are an excellent way to purchase a home!
There are a number of factors that come in to play when considering a veterans eligibility for a VA loan - we will try to give you as much information as we can but please don't hesitate to call us if you have specific questions about eligibility!
Here is the breakdown for VA Loans: Eligibility: Minimum of 90 days active duty during war time (180 days during peace time). 6 years for National Guard or Reserves unless activated for at least 90 days. Unmarried surviving spouses are also potentially eligible. Please inquire! Credit score: 580 and above but optimal buyers are 620+ Down Payment: $0 Down. Always! Funding Fee: 2.15% - 3.3% of the loan amount depending on eligibility and how many times you've used VA loans! This can be financed, paid by the seller or paid at closing. DTI: Can depend on the lender - typically up to 45% if FICO is <640, otherwise potentially up to 60%! Term(s): Fixed and Adjustable rate options, available terms up to 30 years Cash Reserves: No reserves required!
Seller Concessions: VA has a different definition on concessions, which are separate from closing costs and seller can pay up to 4% concessions. Concessions can include the funding fee, prepayments for taxes and insurance, gifts, rate buydowns and payoffs of the veteran's debts (tax liens, lease termination fees, etc). There is no limit to what the seller can pay as far as closing costs are concerned.
Entitlement: I don't want to get too deep into entitlement because everyone's situation is different, but here are the basic numbers for a veteran with full entitlement available:
Basic entitlement is $36,000; Bonus entitlement is up to $77,275 in 2018, for a total of $113,275
$113,275 represents 25% of $453,100 which is the max loan amount (In Michigan) for zero down payment.
***THE LENDER ALWAYS HAS TO HAVE A 25% GUARANTY ON THE LOAN. IF YOU ARE PURCHASING A HOME FOR MORE THAN WHAT YOUR ENTITLEMENT WILL COVER, YOU WILL HAVE TO PAY 25% OF THE DIFFERENCE***
VA Appraisals: lot of myths surrounding VA appraisals but the important thing to remember is that they:
Must be completed in 5 days or less (In Michigan)
Cost less than standard conventional and FHA appraisals
Have TWO ways to get a reconsideration of value if appraisal comes in low
The BOTTOM LINE - We are SICK of seeing VA offers turned away over conventional offers when the VA loan is the best thing since sliced bread!!! We not only want to help veterans purchase homes, but we want to educate the real estate community so they understand that VA loans SHOULD be the preferred over other offers!!
When you're ready...
Fill out our affordability analysis or go ahead and contact us with your questions and open up a dialogue so we can help you determine your eligibility. We look forward to serving our Veterans!
Copyright 2018 Archer Home Mortgage LLC. All Rights Reserved.
Archer Home Mortgage, LLC NMLS# 1620814 1000 W Maple Rd #109 Troy MI 48084 (248) 881-4848