Getting Approved for VA Loans
Obtaining a Veteran’s Affairs (VA) mortgage offers many benefits for veterans and active-duty members of the US armed services. Unlike a conventional loan, VA loans require no down payment or minimum credit requirement. Because they are backed by the Department of Veterans Affairs, recipients of VA loans can also forgo private mortgage insurance.
Down Payment Assistance
Eligible buyers may apply for down payment assistance totaling 2.5% or 5% of the home’s purchase price. This money can be put toward a down payment, closing costs or other qualifying “pre-closing” expenses.
Do You Qualify?
A loans are all about making it easier for those who serve to purchase a home. If you believe you may qualify, here are a few requirements to consider before applying:
- Active-duty military, veterans, reservists, and National Guard are eligible to apply for a VA loan. Active-duty military personnel generally qualify after about six months of service
- Spouses of military members who gave their lives while on active duty or as a result of a service-related disability can qualify.
- Reservists and members of the National Guard can apply after six years. If called to active duty before that, eligibility is gained after 181 days of service.
VA home loans are a lifetime benefit that can be used multiple times. Honorably discharged veterans of the armed forces can enjoy the perks of these loans on the purchase of any primary residence for life. VA loans cannot be used to purchase a vacation home or investment property.
Though the VA has no minimum credit requirements for loan applicants, the private banks that issue the loans may have their own minimum threshold. Lenders will generally want to see a credit score of 620 or higher for this type of loan. Borrowers must also provide proof of income and have an acceptable debt-to-income ratio.
VA loans may be issued without a down payment, but a one-time funding fee will be assessed. The amount of this fee varies depending on the down payment and the type of veteran who is applying for the loan. An active-duty borrower applying for their first VA loan with no money down would pay a fee of 2.15% of the loan amount. The fee is reduced to 1.25% of the loan amount if the borrower makes a down payment of 10% or more.
Reservists and National Guard members can expect to pay about a quarter of a percentage point more in fees than active-duty members, while veterans and others using the VA loan program for the second time, without a down payment, would pay 3.3 percent of the total loan amount.
Ohio Heroes Mortgage Assistance Program
Veterans of the US armed services are also eligible for the Ohio Housing Finance Agency’s (OHFA) Ohio Heroes program. This program offers discounted mortgage rates for those who have served. To qualify for a discounted rate through Ohio Heroes, borrowers must meet certain criteria. Take the quiz to see if you qualify for this program.
If you are an Ohio Veteran looking for your next mortgage, The Columbus Mortgage Company is here to assist you! Our team of experts will help you take advantage of all relevant benefits you have earned in service to our country.