What are the Steps to use VA Loan?
First, there is a lot of misrepresentation on the VA Loan on the Internet, as well as circulating among realtors and loan officers. It’s important that you work with a VA Loan and Real Estate specialist (like myself) for the following reasons:
- I can determine whether you qualify financially using accurate VA loan protocol, not only individually but also for your housing market.
- There are tons of lenders out there that overcharge, say they’re Veteran Friendly and claim to be helping, BUT, hide their costs in other areas or have to over-charge to keep up with their marketing costs. You need a VA Loan educated loan officer, who has fair pricing, preferably who also served, and has used the VA Loan like myself.
- As an educated VA Realtor, I know the market and can help you decide if you should go for it or wait, contingent upon the market or your personal situation.
Second, we need to get you your Certificate of Eligibility and your Proof of Service DD214 to use your VA Loan from the Department of Veterans Affairs. This can be done by going to E-Benefits or we can do it for you faster when you do it. If you were disabled in the service and filed it, your COE will show “exempt” which means that your VA Funding fee is waived. If not, it is usually built into the loan or you can pay it which is still peanuts compared to an FHA loan or putting 20% down on a home with a higher conventional loan rate.
Third, I will take your application and look at pricing with you to see current rates.
Fourth, start looking for a home or the refinance process and gather needed documents. Contact me and I will explain all the requirements of VA Loan when purchasing a condo, townhome, single family residence, and multi-unit property.
VA Credit Score Requirements:
It depends on the lender I find for you, but generally you want a 620 or higher credit score. When you have a 740 or higher, you are able to attain better pricing but it’s not that much of a difference.
VA funding fees for Active Duty, Reserves or National Guard:
VA Loan Purchase:
If you put 0 Down on Home purchase: 2.3% charge of Loan Amount for 1st time users and 3.6% for subsequent use.
5% down on property purchase: You pay 1.65% for 1st and subsequent use.
If you put 10% down on property purchase: You pay 1.4% of loan amount.
|San Francisco, San Mateo, Alameda, Santa Clara, Contra Costa, Marin, County||VA ConformingLoan***||VA JumboLoan***||ConventionalConforming Loan *||ConventionalJumbo Loan|
|Down Payment||$0 Down||$0 Down||10-10%||10-20%|
|Mortgage Insurance***||None||None||Typically .7% of loan value||Can be higher|
|3 year ARM||Yes||Yes||Yes||Yes|
|5 year Arm||Yes||Yes||Yes||Yes|
*Conventional loans are those that can be sold to Fannie Mae or Freddie Mac and have limits for the High Cost SF Bay Area Counties as shown at this link
*** No mortgage insurance on VA loans typically saves the veteran hundreds of dollars in monthly mortgage payments and is sometimes a factor in loan qualification since the monthly payment is lower.
Other than this, the VA loan transaction process is similar to that of a residential or conventional real estate transaction. The “VA mortgage banking officers” typically guide Veterans through the process of determining the amount of a VA loan they are qualified for.
The VA loan also allows for more flexibility in regards to qualifying and has far less stringent guidelines than a jumbo loan. With the ability to get a much lower interest rate, and less money down, you have the ability to keep your mortgage payment the same, or less, than other programs while not tying up all of your reserves.
Without Dan we would’ve probably abandoned the idea of buying a home in the Bay Area. What he did for us to get the home of our dreams was nothing short of INCREDIBLE. He made sure we were clear on every step of the process, and his attention to detail was impeccable. He is one of the hardest working people we have ever met–period. Super efficient, responsive, honest, with the heart of a lion. He pulled MANY rabbits out of hats for us, and all the while he was very enjoyable to work with day to day. He always made us feel like we were his only client. You need Dan in your life if you are buying or selling. Our realtor for life!