VA loans are arguably the most beneficial loan program available on the market.
VA loans are a type of mortgage loan that are provided by private lenders and guaranteed by the U.S. Department of Veterans Affairs (VA). One of the benefits of VA loans is that a down payment is not necessarily required, so you may be able to purchase a home with no money out of your pocket. Additionally, VA loans do not require private mortgage insurance (PMI), which will save you money on your monthly mortgage payments.
Who's Eligible?
To be eligible for a VA loan, you must be a first, be a military veteran or active duty service member, or the spouse of a service member who has died or is unable to work due to a service-related disability. A Certificate of Eligibility will be required to not only show that you meet the eligibility of the program, but to find out important information that will be needed to qualify.
It is generally a good idea to order a COE before you start the process of buying a home, as it will help you and your loan officer determine your eligibility and the amount of your loan entitlement. We can typically order the COE for you, or you can obtain it yourself through the VA's eBenefits portal or by mailing a request to the VA.
Types of VA Refinances
VA IRRRL
Military veterans and active duty service members who already have a VA loan can refinance their mortgage to reduce their interest rate using the VA Interest Rate Reduction Refinance Loan (IRRRL). Due to the simplified process, which is typically simpler and quicker than a standard refinance, this loan is also known as the VA Streamline Refinance. One of the key advantages of the VA IRRRL is that it frequently does not call for credit underwriting, income verification, or an appraisal, which can speed up and simplify the process. The VA IRRRL also sets a time limit on how long it takes to recover the costs and fees related to the loan, which is helpful.
VA Cash-Out Refinance
Looking to take money out of your equity to pay off high interest credit cards, consolidate debt, renovate your home, fund a business opportunity, etc...? The VA Cash-Out refinance allows you to take up to 100% of the value of the home.
Common VA Guidelines
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The home being refinanced or purchased must be the borrower's principal residence.
This depends on if you have your full entitlement. If you do, you will not have a loan limit as long as you meet one of the following:
- You’ve never used your home loan benefit, or
- You’ve paid a previous VA loan in full and sold the property (in this case, you’d have your full entitlement restored), or
- You’ve used your home loan benefit, but had a foreclosure or compromise claim (also called a short sale) and repaid your entitlement in full
Per VA.gov
If you have remaining entitlement, then your loan will be limited based on where you live or want to live. The current VA loan limit in 2023 was drastically increased by the VA to $726,200 for a single-family home in San Bernardino and Riverside county. Los Angeles and Orange county which are high-cost areas have a set loan limit of $1,089,300 for a single-family home. Multi-unit properties (up to 4 units) have higher loan limits. Contact us for more information regarding the different limits and how they affect you.
For qualified borrowers, a down payment is not required. This is what makes VA loans a significant advantage for military veterans and active duty service members who may not have a lot of money saved or who may have difficulty coming up with the funds for a traditional mortgage. However; it's important to note that some lenders may require a down payment for a VA loan, particularly if you have a low credit score or if you are purchasing a high-priced home. In these cases, the down payment may be used to offset the increased risk to the lender.
The minimum credit score required for a VA loan varies depending on the lender. However, in general most lenders require a minimum credit score of 620. It is important to note that even if you meet the minimum credit score requirements, other factors such as your debt-to-income ratio, income, and employment history will also be taken into consideration when determining your eligibility for a VA loan.
Multi-unit properties are eligible for VA financing. The VA's program allows veterans and active military members to purchase multi-unit properties, such as duplexes, triplexes, and fourplexes, using their VA home loan benefits. The property must be occupied by the veteran as their primary residence, and the remaining rental units can generate income for the borrower to be used to offset the the payment.
- Single family homes
- Condominiums and townhomes
- Multi-unit properties up to 4 units
- Manufactured homes on permanent foundation
How to get started in 6 easy steps
- Fill out a loan application.
- Speak with one of our VA loan experts
- Gather documentation
- Go over loan options and terms with your loan expert
- Get pre-approved
- The loan process begins