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VA Loan Requirements

Written By: admin - Feb• 12•13

VA Loan Requirements

VA Loans are part of the bill known as the GI Bill of Rights. This law guaranteed homes to servicemen, active and retired, that require no down payment and that are federally guaranteed. In this manner, if someone defaults on a loan the lender is not at risk knowing the repayment of the loaned monies will be repaid by the government. The VA home loan program’s main purpose is to help servicemen purchase a home at rates of interest that are competitive with the rates of other mortgage loans. It has helped millions of servicemen and their families to have the home of their dreams. As is the case in all mortgages, each case is different and each person will receive a VA loan depending on their particular set of circumstances.


WHO IS ELIGIBLE? 
VA loan requirements apply to nearly all active duty personnel and to those who have an honorable discharge. Others who are eligible for a VA loan are those who have served actively for 181 days during peacetime or 90 days during war time. National Guard members who have served six years may also apply as well as the spouses of service members who were killed in the line of duty. 

WHERE TO START? 
Start looking for a home that you would like to purchase. Find a lender and apply for a loan. To start a loan process you will need several important pieces of information. Your social security number as well as your place of residency and the names and addresses of your employers for the past two years. You will be asked for your gross monthly salary, bank account numbers and balances and all balances and monthly payments of any outstanding loans. Veterans should bring their Certificate of Eligibility and their DD214. W2′s for the past two years as well as current pay stubs will be required. All of this is worth the trouble, even though it requires an enormous amount of paperwork, when you consider that you will not need to make a down payment plus you will be receiving a low interest rate, if your loan application is accepted. 

CREDIT HISTORY 
As part of the VA Loan Requirements a serviceman’s credit history will help determine if the requested loan will be approved. His responsible lifestyle and willingness to pay his debts is proved if payments on outstanding debts have been made on time for the last 12 months. This serves as a guide to the lender for the repayment of his future debts. If he has no established credit, the lender may take into account how rent, utility bills and the like have been paid. These may be used to establish a credit history and a path of paying on time. If the serviceman has had credit problems he may take a Consumer Credit Counseling Plan course. Here it will be determined if he is a satisfactory credit risk after he makes 12 months of on time payments as he attends counseling. 

Remember that VA Loan Requirements must be met to receive a VA loan. The private lender, from which you take out a mortgage, also has a set criteria. This criteria includes checking your credit score and examining your debt-to-income ration. This ratio is found by dividing your income by all of your outstanding debt. A low percentage is advantageous.

Another VA loan requirement is to have an appraisal done on the property you wish to purchase. When the appraisal is complete and all of the lender’s guidelines have been met, your loan will be approved and your home will be yours. 

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