How Do I Get These Benefits
First, youll need to apply for an SAH grant. If you get the SAH grant, your loan guaranty agent will tell you if you qualify for VMLI. If you already have an SAH grant, ask your agent about VMLI.
Your agent will help you fill out a Veterans Mortgage Life Insurance Statement .
Note: Remember, you must apply for VMLI before your 70th birthday.
Va Loan Vs Conventional Loan: Debt
Your debt-to-income ratio is a percentage representing how much of your monthly gross income goes toward recurring monthly debts like rent, student loans, auto loans and credit card payments.
Your lender looks at your DTI to determine how likely you are to make your mortgage payments on time each month. The lower your DTI, the less risk you pose to your lender.
- VA loans: While VA loans dont have specific requirements for DTI, most lenders prefer a DTI of 41% or lower. Lenders are also required to look at compensating factors such as your credit score, liquid assets or military benefits so you can possibly qualify with a DTI higher than 41%.
- Conventional loans: While most lenders prefer your DTI to be lower than 40%, you might be able to qualify for a conventional loan with a DTI as high as 50% although your lender will likely raise your mortgage interest rate to offset the risk your high DTI may pose.
Does A Coe Mean That I Qualify For A Va Loan
No, if you have a COE, it is not a guarantee that you will be approved for a VA loan. You are still required to qualify for your loan according to the VA mortgage guidelines. Guarantees on VA loans refer to the promise made by the VA to a lender that they will make a repayment should the borrower default.
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What Is An Escrow Account
Escrow is a legal arrangement where a third party temporarily holds this money or property until specific conditions outlined are met.
An escrow account will hold funds for insurance, taxes, etc., throughout the term of the mortgage. Escrow accounts are in place to protect both buyers and sellers of a home, and are typically used for two reasons: to protect the buyers good faith deposit and to hold funds for property taxes and homeowners insurance.
Are Va Home Loans More Forgiving Of Bad Credit
VA home loans are an important benefit for veterans partly because the credit requirements are often more lenient than their counterparts in the conventional lending industry. VA mortgage credit requirements arent necessarily more forgiving of bad credit, but the standards to which applicants are held differs from conventional loans.
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Fha Mortgage Insurance Premium
FHA loans feature minimum down payments as low as 3.5% and have easier credit qualifications than with conventional loans. Most FHA home loans require an upfront mortgage insurance premium and an annual premium, regardless of the down payment amount. The upfront premium is 1.75% of the loan amount, and the annual premium ranges from 0.45% to 1.05% of the average outstanding balance of the loan for that year.
You pay the annual mortgage insurance premium, or MIP, in monthly installments for the life of the FHA loan if you put down less than 10%. If you put down over 10%, you pay MIP for 11 years.
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Va Loan Escrow Waiver Requirements
Each lender will have different requirements for obtaining a VA loan escrow waiver. However, common VA loan escrow waiver requirements can include:
- That the VA loan be at least one year old
- That all payments have been made on time, and in full
- That no taxes or homeowner insurance payments are due within 30 days of the request for a waiver
Check your eligibility with today’s top lenders
What Is Ho 3
The most common homeowners policy according to the National Association of Insurance Commissioners is the HO-3 or Special Form. The Special Form typically insures your property against all perils, including: Fire and smoke damage. Theft, riots, and vandalism. Wind, hail, lightning, ice, snow, and sleet. Trees and other falling objects.
When You Apply For A Loan With A Credit
Some of the states have community-property laws, where the VA lenders are required to factor in the financial obligations and credit rating of your partner . These rules are applicable even when she or he will not appear on the title of the home or even your mortgage.
These states include the following:
If your spouse has less-than-perfect credit or when they owe alimony, maintenance, or child support, it can make it harder for you to achieve approval for a VA home loan. If you plan to apply for a mortgage on your own, rather go for one of the conventional loans. The financial status or history of your spouse wont be considered when he/she does not appear on your loan application.
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How Do I Know If I Am Eligible For A Va Home Loan
VA loans are not only available to veterans. Other military members are also eligible for these loans.
The eligible VA borrowers include:
- Members of the National Guard
- Officers at the National Oceanic And Atmospheric Administration
- Cadets at the U.S. Air Force, Coast Guard Academy, or Military
Minimum terms of service are usually a requirement.
Basic Homeowners Insurance Coverage
Your homeowners insurance will compensate you for damage to or destruction of your home and personal belongings caused by an event covered under your policy. In some cases, you will also be covered if you injure another person or damage property. Homeowners insurance has three primary functions:
- Make repairs to your house, yard, and other structures.
- Replace or repair your personal belongings.
- Ensure youre protected if youre legally liable for the injury or damage of someone else.
In general, homeowners insurance policies cover six types of risks.
|Pays when someone is injured or damaged by negligence or inadvertence.||$100k to $500k.|
|Medical payments||Whether third parties caused the injury or not, it pays to treat the victim. The insurance also covers someone hurt by you, a family member or a pet.||Between $1,000 and $5,000.|
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How Does The Va Funding Fee Differ From Mortgage Insurance
The VA funding fee is also sometimes referred to as VA loan private mortgage insurance or VA loan mortgage insurance. The funding fee is the VAs version of mortgage insurance but unlike traditional mortgage insurance, its usually a single payment.
The terms funding fee, VA loan PMI and VA loan mortgage insurance are used interchangeably, and for the most part, they are very similar and go toward the same cause: partially protecting the lender and the VA in the event of a home buyers mortgage default.
Here are mortgage insurance expectations for some different types of home loans:
- With a conventional loan, youd pay for monthly PMI .
- With an FHA loan, youd pay a monthly mortgage insurance premium, or MIP in addition to an upfront mortgage insurance payment.
- If you took out a VA loan, youd pay the one-time mortgage funding fee that can be paid at closing or built into the loan amount.
While these terms have specific meanings within their bureaucracies, theyre all pretty similar if youre looking to buy a home.
VA loan rates are dropping!
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What Is Pmi And How Is It Calculated
When do you have to pay private mortgage insurance and how much will it cost you? It depends on your loan-to-value ratio. Find out when you have to pay PMI and learn how to calculate the cost.
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Where To Find Discounts For Veterans On Homeowners Insurance
If youre an active-duty member of the armed services or a veteran, several insurance companies provide reductions on your homes insurance premiums based on your career.
The following is a list of companies that offer discounts to military members.
With Farmers, you can reduce your premiums by taking advantage of the affinity discount. This discount applies to employees, retirees, members of approved businesses, and professional groups. Armed forces personnel and veterans are among the professions that qualify for the discount.
2. Liberty Mutual
According to their website, veterans and those serving in the armed forces receive a military discount from Liberty Mutual.
The GEICO website details that active service members, veterans, and the National Guard and Reserves members may qualify for a 15% military discount.
We Are Your California Va Mortgage Specialist
Would you like to learn more about the many benefits offered by a California VA loan? Give us a call or send us an email. Bridgepoint Funding specializes in this program, and we can answer any questions you might have.
For nearly 20 years, weve been helping California military members and veterans turn their homeownership dreams into reality. We can even offer VA loans over $1 million, which is ideal for high-priced real estate markets like the San Francisco Bay Area.
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Cost Of Private Mortgage Insurance
The cost of your PMI premiums will depend on several factors.
- Which premium plan you choose
- Whether your interest rate is fixed or adjustable
- Your down payment or loan-to-value ratio
- The amount of mortgage insurance coverage required by the lender or investor
- Whether the premium is refundable or not
- Your credit score
- Any additional risk factors, such as the loan being for a jumbo mortgage, investment property, cash-out refinance, or second home
In general, the riskier you look according to any of these factors , the higher your premiums will be. For example, the lower your credit score and the lower your down payment, the higher your premiums will be.
According to data from Ginnie Mae and the Urban Institute, the average annual PMI typically ranges from .55% to 2.25% of the original loan amount each year. Here are some scenarios: If you put down 15% on a 15-year fixed-rate mortgage and have a credit score of 760 or higher, for example, youd pay 0.17% because youd likely be considered a low-risk borrower. If you put down 3% on a 30-year adjustable-rate mortgage for which the introductory rate is fixed for only three years and you have a credit score of 630, your rate will be 2.81%. That happens because youd be considered a high-risk borrower at most financial institutions.
How Much Down Do I Need To Pay For A Mortgage
You can reassure the bank that you have skin in the game by puttingat least 20% down. Or, you can pay mortgage insurance each month. For non-government loans, that mortgage insurance is called Private Mortgage Insurance . PMI is expressed as a percentage of your mortgage payment. So in addition to paying a combination of interest and principal on your loan, youre also paying a monthly insurance fee to the lender, until you build enough equity that the bank waives your PMI.
What Is Va Mortgage Insurance
So, theres really no such thing as VA mortgage insurance. One of the benefits of VA loans is that they do not require monthly mortgage insurance payments .
Mortgage insurance is insurance payments made on a mortgage if you put less than 20% down. Its helpful in the sense that mortgage insurance lowers the risk to the lender of making a loan to you, so you can qualify for a loan that you might not otherwise be able to get. But, it also increases the cost of your loan, so you might have higher monthly payments, higher closing costs, or both.
But for mortgage insurance for VA Loans? There isnt any!
A Quick Primer On Usda Loans
USDA loans are a type of mortgage. Theyre geared toward lower-income home buyers in areas deemed rural by the U.S. Department of Agriculture, the agency that guarantees these loans.
You can use the USDAs property eligibility map to see which areas are eligible for USDA loan funding. Land-wise, most of the U.S. is eligible for USDA funding ineligible areas include cities and the areas immediately surrounding them.
USDA loans dont require a down payment, which removes a substantial barrier to homeownership that many would-be home buyers encounter. After all, a 3% down payment the lowest you can go on a conventional loan on a $250,000 home is $7,500. For those on lower or middle incomes, saving that much can take a long time.
Plus, allowing borrowers to get a mortgage with 0% down means they can hold onto their cash for other purposes, such as home improvements or emergency savings.
When it comes to interest rates, USDA loans are comparable to VA loans in that these mortgages typically offer lower rates than other loan programs, such as conventional or FHA loans.
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The Va Loan Guaranty Program
The VA Loan Guaranty Program is a government-backed loan guarantee that allows veterans, active service members, and surviving dependents to purchase homes with no money down. The program makes it easier for qualified borrowers to finance their dream homesits that simple. This program has been in the lives of military members and their families since 1944, making homeownership accessible and more affordable.
Despite the change in lenders regulations and underwriting standards, the benefits of the VA Guaranty Program arent going to change. So if you have an interest in homeownershipnot to mention if you already own a homeyou must understand the process and whats in there for you. Whether youre in the process of purchasing your first home or refinancing an existing mortgage, be sure to do as much research as possible to avoid future surprises.
In addition, qualifying for a VA loan does not require you to put any money down or pay private mortgage insurance . These are two of many reasons why VA loans are attractive financing tools for first-time homebuyers, especially those who have served in war zones. All you need to do is go with your gut and pick the best financing option, bearing in mind that VA loans were created to honor and reward you for your sacrifices. So, gravitate to the mortgage companies, loan officers, and realtors who honestly embrace that spirit.
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Purchase And Construction Loans
Due to the Blue Water Navy Vietnam Veterans Act of 2019, the VA funding fee is equalized for all branches of service starting January 1, 2020. For active duty military members and veterans, this means an increase in VA funding fee costs for a period of 2 years. If you have a service-connected disability that you are compensated for by the VA or if you are a surviving spouse of veteran who died in service or from service-connected disabilities, the funding fee is waived.
|Type of Veteran|
- Veterans who previously lived in a home they had to then rent out will typically qualify for a no appraisal Interest Rate Reduction Refinance. The Veteran’s Administration also allows Veteran Homeowners to refinance from a Conventional loan to a VA mortgage Loan. This process, however, does require an appraisal.
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Secure A Certificate Of Eligibility
Youll need this to be eligible for your VA loan. Youll need to provide proof of your military service based on your status.
VA-approved lenders, like Rocket Mortgage, can help you get your VA certificate of eligibility quickly with proof of service.
Tell your lender you need your certificate of eligibility early in the process so they can help you get it.
Va Loan Vs Conventional Loan: Property Type
One of the biggest differences between VA and conventional mortgages is the type of property you can finance with each type of home loan.
- VA loans: According to VA loan occupancy requirements, if youre financing with a VA loan, the home or property must serve as your primary residence. While you cant use a VA loan to directly purchase a second home, investment property or vacation home, you can purchase a multifamily property of up to four units to rent out as long as you occupy one of the units as your primary residence.
- Conventional loans: Conventional loans dont require you to occupy the home youre purchasing as your primary residence. This means you can use a conventional mortgage loan to purchase a second home, vacation home, rental home or other investment property with no strings attached, as long as your lender approves it.
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How Do You Assume A Va Loan
There are 2 ways that you can currently assume a VA loan.
When the new buyer is a veteran that qualifies who substitutes his/her VA eligibility for eligibility of a seller. The new buyer of the home qualified through the VA standards for mortgage payments. This is usually the safer method for a seller since it allows these loans to be assumed with the reassurance that the buyer becomes responsible for this loan, while the seller will no longer hold responsibility when it comes to the loan.
The lender or/and the VA must first approve loan assumptions. The loans that are serviced by lenders that have automatic authority may process an assumption without the need to send them to the VA Regional Loan Center. For the lenders that do not have automatic authority, these loans must first be sent to a VA Regional Loan Center for approval. These processes can take up to several weeks. Once a VA loan is assumed, it is the responsibility of the servicer to ensure the homeowner that has assumed the property matches up to both the lender and VA requirements.