Using Crypto For The Above Va Loan Scenarios
Both of the above scenarios share a common requirement: cash. As a result, if you plan on using crypto, you need to take an additional step. In Scenario 1, lenders wont accept direct transfers from your cryptocurrency wallet to cover closing costs. In Scenario 2, nor will they accept your crypto holdings in lieu of documented cash reserves. Instead, borrowers will need to liquidate these assets, that is, sell and convert them to cash. Once you make these sales, lenders will then verify that the cash has been deposited into one of your traditional bank accounts.
For example, if you have $10,000 in a crypto account to cover closing costs, showing a lender that account balance will not suffice. Instead, youll need to A) sell your holdings, and B) deposit the funds into a cash account. Lenders will then verify this cash by reviewing your account statements. In this fashion, you can indirectly use crypto to get a VA loan. That is, you can convert your crypto holdings into cash and use the cash to pay the loan-related costs or meet reserve requirements.
Veteran Mortgage Relief With The Va Loan
The U.S. Department of VeteransAffairs, or VA, provides home retention assistance. The VA intervenes whena veteran is having trouble making home loan payments.
The VA works with loan servicersto offer options to the veteran other than foreclosure.
In fiscal year 2019, the VA madeover400,000 contact actions to reach borrowers andloan servicers. The intent was to work out a mutually agreeable repaymentoption for both parties.
More than 100,000 veteranhomeowners avoided foreclosure in 2019 alone thanks to this effort.
The initiative has saved thetaxpayer an estimated $2.6 billion. More importantly, vastnumbers of veterans got another chance at homeownership.
Va Loan Vs Conventional How Do They Compare
If youve served in the armed forces, you may be eligible for a VA loan to help you purchase or refinance a home.
These loans are great for many veterans and active-duty servicemembers because they require no down payment and have no limits on how much you can borrow, depending on how much VA benefit you have available.
But if you qualify for a conventional loan, thats an option worth considering as well.
Some conventional loans require as little as 3% down, and while thats not as good a deal as 0% down, you may be able to use gift funds toward the down payment.
So youd get to buy a home with no money out of pocket, and youd have more flexibility in the types of properties you can buy.
And thats just the tip of the iceberg when comparing the trade-offs of these loan programs.
Thats why weve done a deep dive on how VA loans and conventional loans stack up, so you can figure out the best option for your homebuying plans.
Recommended Reading: Who Owns American Pacific Mortgage
Eligibility Is Just Part Of The Va Loan Process
Eligibility is just one part of the VA loan. Four key parts make up the process. If you’re eligible and want to buy a home, get ready to prove that you also have the ability to pay your mortgage and any buying-related costs. Your lender will likely run a credit report very early in the process, and they will ask about your assets and income up front. Be prepared to back up any claims with documentation.
However, the VA loan qualifying process is straightforward. While individual lenders determine the qualifying guidelines, a credit score of around 620 is generally needed, along with a debt to income ratio of 41% or lower. Exceptions to the DTI rule do apply, such as if you have more than enough residual income. You’ll need to have enough money left over to live after paying all your monthly expenses, including your new mortgage. An approved lender will determine if you have the ability to pay for your loan.
4 Keys to VA Loan Approval
For more information about VA loan eligibility or to obtain your COE, contact an approved lender here.
Can I Have Two Va Loans At A Time
Technically you can have two VA loans at the same time. But the only way for this to be possible is for you to have entitlement remaining after getting your first VA loan.
If youre interested in getting a new home, the best approach is to make sure your first mortgage is paid off and your entitlement is restored. It can be difficult to be eligible for a second loan when the first loan is still open.
Read Also: How To Get A Mortgage With Poor Credit
Va Loan Vs Conventional Loan Faqs
Is a VA loan better than a conventional loan?
A VA loan is one of the best mortgage options in the market if youre eligible, that is. Only veterans, active-duty servicemembers, and some surviving spouses can qualify for these zero down loans.VA loans dont require mortgage insurance, and borrowers with full entitlement dont have loan limits, either. They can also be more affordable for homebuyers with lower credit scores, as conventional loan interest rates can be higher for borrowers with credit scores under 680.But conventional loans offer a lot of benefits as well. The minimum down payment is just 3%, and the private mortgage insurance requirement ends when you reach 20% home equity. If you put down 20% on a conventional loan, you dont have to pay PMI at all.In the current housing market, some sellers prefer offers with conventional loans to those with VA financing.
What are the disadvantages of a VA loan?
VA loans have strict property requirements that can make for a tough appraisal process, especially if the home is older and hasnt been well-maintained. You can only use a VA loan to buy a primary residence, whereas conventional loans may be used to finance vacation homes and investment properties.
Why are VA home loans bad?
Buying Versus Renting Using Entitlement
This might occur if, for example, you are stationed at a different location but dont want to sell your existing home. In this case, you decide to rent out your existing property and buy another one, explains David Reischer, real estate attorney and CEO of LegalAdvice.com in New York City.
But theres a catch: You cant convert your primary residence into a rental and buy a similar-sized home in the same location. The second home would have to be a larger residence for a growing family or would have to be in a different area.
You would not be able to use any of that rental income to reduce your debt-to-income ratio when applying for the second VA loan, says Yvette Clermont, branch manager and mortgage consultant with Pewaukee, Wisconsin-based Inlanta Mortgage. But that rental income may help offset your mortgage payment, helping you qualify for the second VA loan.
Read Also: Why Do I Pay Escrow On My Mortgage
How Do Va Loans Work
Basically, you fill out paperwork from the VA that verifies your eligibility for the program. You also receive whats known as your entitlement, which is the dollar amount guaranteed on each VA loan. Lenders might be willing to loan up to four times the amount of your entitlement.
With all of that in place, its possible to get a VA loan with no money down. VA loans also dont require private mortgage insurance , but you will pay a VA funding fee when you close, which will be a percentage of the loans total value. That fee helps keep the program running for future borrowers.
Can I Get A Certificate Of Eligibility For A Va Direct Or Va
You may be able to get a COE if you didnt receive a dishonorable discharge and you meet the minimum active-duty service requirement based on when you served.
|When did you serve?||You meet the minimum active-duty service requirement if you served for at least this amount of time:|
|When did you serve?||Between August 2, 1990, and the present||You meet the minimum active-duty service requirement if you served for at least this amount of time:||90 days of active-duty service|
|When did you serve?||Any time period||You meet the minimum active-duty service requirement if you served for at least this amount of time:|| 6 creditable years in the Selected Reserve or National Guard, and one of the descriptions below is true for youAt least one of these must be true. You:
Don’t Miss: What Is The Mortgage On A 3 Million Dollar Home
Can Existing Va Borrowers Lower Their Interest Rates By Refinancing A Va Loan
On top of that, its also possible to reduce your interest rate by refinancing a VA loan through the interest rate reduction refinance loan . This loan requires you to use additional VA financing to replace your current loan and comes with an upfront VA funding fee of 0.50% of the loan amount.
In the end, the VA loan program can be a big help to those who have sacrificed their country and want to achieve the dream of homeownership.
Who Is Eligible To Receive A Va Loan
If youve served in the armed forces, youre sure to have seen lists of benefits in which veterans are entitled. Perhaps the biggest benefit of being a veteran is the VA loan. Whether youre active duty, a service veteran, a surviving spouse or even, in some cases a civilian, you may be eligible for a VA loan. In all cases, the VA has specific requirements that must be met before a veteran is considered eligible.
Active duty military, veterans, surviving spouses, and in some instances civilians are eligible for a VA loan. VA loans have requirements the veteran must fulfill before they can be considered eligible.
Don’t Miss: How To Pay Mortgage Online Rbc
What Happens When Someone Dies With A Va Loan
What happens to the VA loan if the borrower dies before paying off the debt in full? Assuming a VA loan after death means the surviving spouse will be responsible for the debt. If the borrower is single but has a co-borrower, then they will take over the debt. If the deceased borrower has neither, the borrowers estate will handle the debt. The VA loan could also be assumed by an eligible buyer who could be a veteran, non-veteran, or even the children of the deceased owner of the original loan.
How Much Does A Va Loan Assumption Cost
According to the VA Lenders Handbook, lenders may charge a fee for VA loan assumptions. Other fees also apply including processing fees and the cost of credit reports.
For lenders that are allowed to approve VA loan assumptions, they may charge a processing fee of $300 plus the actual cost of a credit report. Meanwhile, lending institutions that need to forward VA loan transactions to a local VA office for manual approval, may charge $250 + the cost of a credit report.
Those who assume VA loans must pay a funding fee, which is equivalent to 0.5% of the VA loan to their local veterans affairs office 15 days after the VA loan assumption.
Some people who are assuming the VA home loan are exempted from paying the funding fee. These include:
- Veterans who are receiving or entitled to receive compensation from the VA for disability sustained while in service.
- Veterans who are deemed qualified to be compensated after a pre-discharge disability rating or exam.
- Surviving spouses of veterans who died from a service-related disability or while in service.
If you want to get an estimate of the monthly payments on a VA home loan, you can use a VA loan assumption calculator online.
You May Like: Should I Refinance My 30 Year Mortgage
Who Is Exempt From The Va Loan Assumption Funding Fee
Certain people assuming VA home loans are, in general, exempt from paying the one-half-of-one-percent funding fee mentioned above.
- Veterans entitled to receive VA compensation for a service-connected disability.
- A veteran rated eligible to receive compensation following a pre-discharge disability exam/rating.
- Surviving spouses of veterans who died in service or from a service-connected disability.
Other Things To Consider
Your manufactured home may be way less expensive than a stick-built equivalent, but its still likely to be the single biggest purchase youve made so far in your life. So you need to think through your purchasing decision properly. In particular, bear in mind two points.
First, manufactured homes dont typically appreciate in value, though there are rare exceptions. They dont usually depreciate as quickly as a car but the process is similar. One of the reasons for that is they have a shorter life expectancy than a stick-built home. Of course, you may be able to slow depreciation by maintaining your home better than most owners do.
And that brings us to the second point. Investing in maintenance is just one of a number of homeownership expenses you can expect. Youll likely face property taxes, homeowners insurance premiums and perhaps park fees, too. Your lender will look at all those when it decides whether you can afford the loan you want. So get your head around them before finding a lender to apply for VA mobile home financing.
Don’t Miss: Do Mortgage Lenders Work On Saturdays
What Is A Certificate Of Eligibility
A COE is a document that shows your mortgage lender that youre eligible for a VA loan. To get a COE, you need to demonstrate proof of service. The proof you need to submit varies based on whether youre an active-duty military member, a veteran, a surviving spouse, etc.
If youre eligible, Rocket Mortgage® can help you secure your COE.
How To Get A Va Energy Efficient Mortgage
Wondering whether an Energy Efficient Mortgage is right for you? There are a lot of options when it comes to the VA loan, and an EEM is just one of the many ways to maximize your hard-earned benefit.
Energy Efficient Mortgages are an excellent option to pay for qualified improvements to increase a homes energy efficiency and save money on utility bills. EEM homes can provide increased protection against heat, cold, pollution and moisture, and are also great at reducing your carbon footprint.
Also Check: Can You Pay Back A Reverse Mortgage Early
What Is A Va Funding Fee And How Much Does It Cost
While you dont have to worry about PMI, you do have to pay a VA funding fee. Your VA funding fee depends on the size of your VA loan down payment, and whether its your first-time use of the benefit.
So, while a VA loan down payment isnt required, it can save you money to make a down payment.
Getting A Va Loan After Bankruptcy
Qualifying for a VA loan after bankruptcy is certainly possible, often in a shorter period than you would with a conventional loan.
You can certainly qualify for a VA loan after bankruptcy, often in a shorter waiting period than you would with a conventional loan.
A VA loan after bankruptcy is not a short or easy road. According to credit scoring firm FICO, a bankruptcy can cause your credit score to drop anywhere from 130 to 240 points. It can take three to 10 years for a consumer’s credit score to fully recover, and you may need to spend a good chunk of that time working to rebuild your credit.
The good news for VA borrowers is that the credit score hurdle is typically lower than what you’ll need for conventional or even FHA financing.
Lenders will usually have a “seasoning period” for borrowers who have experienced bankruptcy. A seasoning period is how much time you have to wait before being eligible to close on a home loan.
Don’t Miss: What Credit Score Do You Need For A Conventional Mortgage
Youre Our First Priorityevery Time
We believe everyone should be able to make financial decisions with confidence. And while our site doesnt feature every company or financial product available on the market, were proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward and free.
So how do we make money? Our partners compensate us. This may influence which products we review and write about , but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services.Here is a list of our partners.
How Are Va Mortgage Rates Set
At a high level, mortgage rates are determined by economic forces that influence the bond market. You cant do anything about that, but its worth knowing: Bad economic or global political worries can move mortgage rates lower. Good news can push rates higher.
What you can control are the amount of your down payment and your credit score. Lenders fine-tune their base interest rate on the risk they perceive to be taking with an individual loan.
So their base mortgage rate, computed with a profit margin aligned with the bond market, is adjusted higher or lower for each loan they offer. Higher mortgage rates for higher risk lower rates for less perceived risk.
So the bigger your down payment and the higher your credit score, generally the lower your mortgage rate.
» MORE:Get your credit score for free
Read Also: What Is Excellent Credit Score For Mortgage