VA Guaranteed Home Loans are one of the most popular veterans benefits.  At First Equity, we specialize in VA loans.  We understand the guidelines and how to make the program work for you.  Since we understand VA loans, we can make the process move quickly and efficiently for you.

Qualifying for a VA Home Loan                  

VA home loans are guaranteed by the Department of Veterans Affairs.  The loans are made by lenders who are required to follow VA guidelines.  It is important that the lender be experienced in closing VA loans in order to qualify the veteran and take advantage of all of the program's benefits. 

In terms of qualifying for the loan, there are four areas to consider:

Military Service

To qualify for a VA loan, the borrower must have served in some branch of military or military reserves for a sufficient period of time.  Generally for full time active duty, this requires 2 years.  Reserve duty varies depending on the  nature of duty.  To find out if you qualify you should request a Certificate of Eligibility from the Department of Veterans Affairs.  Contact your First Equity representative for assistance.

Credit

Since VA offers 100% financing, veterans must have a reasonably good credit history.  VA does not have a minimum credit score for qualifying.  Instead the underwriter will review the total credit history, with emphasis on the past 12 months.  Timely rental or housing payments are very important.  Bankruptcies or foreclosures must be at least twelve months old.  Outstanding collections or judgments may have to be paid off to qualify.

Income

Veterans must have a stable source of income, and a reasonable balance between income and debts.  Generally, the total debt should not exceed 42% of gross (pre-tax) income.  Income from part time jobs, bonuses or commissions can be counted if there is a 2 year history.

Collateral

The house to be purchased (or refinanced) will be appraised by a VA approved appraiser.  The VA will pick the appraiser, and in addition to looking at value, the appraiser will be looking for items that could need major repairs (such as roof, furnace, foundation).  If there are any visible problems, additional inspections may be required to insure that the house is in good condition. 

What does it Cost?

After determining if the borrower can qualify for VA financing, the total cost must be considered.  There are 4 basic components:

Closing Costs

Fees and costs are incurred at closing.  Generally these costs are:

	Application Fee
	Appraisal
	Title Insurance
	Closing Fee
	Recording Charges
	Survey

Fees such as origination fees and points are negotiable.  The VA funding fee can be financed.

Prepaid Items

These are fees and charges that are paid at closing and monthly throughout the course of the loan. 

	Property taxes
	Homeowners insurance
	Interest

The amounts can vary widely from home to home.  Your loan officer can assist you in estimating these up front charges.

Interest Rate

The interest rate for VA financing depends on certain factors.  Interest rates fluctuate daily.  Your First Equity representative can offer you a rate lock at the time of application which will guarantee your agreed upon rate at closing. 

Monthly Payment

Your payment will include

	Principal
	Interest
	Property taxes
	Homeowners insurance
	Monthly condominium or association fee, if buying condominium apartment

Before making an offer on a home, ask your First Equity representative to help you estimate your monthly payment for the particular home in which you are interested. 

Call (800) 557-0270 for details.