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Are you in the market for a new home and also a Veteran? The good news is there are tons of benefits that come with using a VA loan. The Gifford Group can help you with your home search and help get you into your new home! 

If you are a Veteran, you need to know about your VA home loan certificate of eligibility. 

Thank you for your Service! 

A new study of 1,000 active-duty service members and veterans found that nearly all respondents were aware of what a VA loan is, but many respondents did show some confusion about their use. Nearly half of active-duty respondents believe VA loans have higher interest rates than conventional loans—which they don’t, the survey notes. 

• Seventeen percent of veterans and 45% of active-duty members believe a down payment of more than 20% is necessary.
• About half of active-duty members and nearly one-third of veterans believe a VA loan can only be used once.
• Nearly 60% of active-duty members and 41% of veterans believe VA loans have longer processing times.
• Fifty-eight percent of active-duty members and 40% of veterans think VA loans will have delays due to all the paperwork involved.
• Many of the respondents believe VA loans don’t provide much savings compared with conventional loans.

1. It is going to cost the seller more money 

     Wrong! most of the required fees are the same as other loans, and a few extra are usually
    paid for by the lender, not the Seller or real estate agent) 

2. Sellers believe since they are getting 100% financing that the program and borrower must be shaky! 

      Nope, it is just one of the benefits of serving our great country, it is a thank-you for their service! 

3. Sellers believe it's going to take longer to close!

      No! VA loans take no longer to close than any other loan, 

4. Seller and Agents believe that the appraisal will come in low and require crazy repairs

     Not true! They even have a thing called "Tidewater" to help you increase the appraisal if it does come in low, (see below) 

5. The VA is the lender, this is wrong. The VA only guarantees again defaults. 

    Most lenders can underwrite your VA loan, contact us today. 

No down payment on a VA loan. Most home loan programs require you to make at least a small down payment to buy a home. Rather than paying 5%, 10%, or 20% down on the home’s purchase price and using up all of your cash. You can finance up to 100% of the purchase price using a VA loan. The VA loan is a true no-money-down home mortgage opportunity.  You can put $0 Down and still not have (PMI) Private mortgage insurance!

0% down in this market can save you lots of cash that can be used to furnish your new home.  The minimum down payment for conventional loans is typically 5%, while the borrower would need to put down at least 20% to avoid private mortgage insurance (PMI). 

FHA loans require a minimum 3.5% down payment and monthly mortgage insurance. In contrast. VA loans do not require a down payment or monthly mortgage insurance! 

For most first-time VA buyers, this fee is 2.15% of the loan amount, provided you’re not making a down payment. Buyers who receive VA disability compensation are exempt from paying this funding fee. See more below. 

 Download our Home Buyers Guide.  

Like all mortgage types, VA loans do require specific documentation, such as an acceptable credit history and sufficient income to make your monthly payments. 

But with that said compared to other loan programs, VA loan guidelines tend to be more flexible. This is made possible because the VA loan is guaranteeing the home loan.

The Department of Veterans Affairs genuinely wants to make it easier for military members, veterans, and qualifying military spouses to buy or refinance a home.

The VA has established no minimum credit score for a VA mortgage but remember each lender will have its own requirements. 

The VA has great benefits for people with past credit issues. 

What if have Derogatory Credit issues like Bankruptcy? 

VA has a 2-year rule waiting for the rule, on both chapter 7 bankruptcy and forecloses. 

VA you only have to have made a 12-month satisfactory payment history for Chapter 13

Short Sale, if payment history was not affected before the short sale, then a waiting payment period will not exist. 

Judgments, Federal Debts, and tax liens must be paid in full. 

FREE Credit Reports. Federal law allows you to:

Read about  Bankruptcy and Foreclosure and different requirements for getting a loan from a lender again in the future.  

VA loans are neither originated nor funded by the VA.  VA loans are offered by many of the same lenders you will rate shop and are not direct loans from the government. So, the mortgage rates you are quoted are not set by the VA but by the lenders. 

This means you can shop around and compare loan offers and still choose the VA loan that works best for your budget. As there are some larger funding fees, the rates are normally lower. See the current mortgage Rates.

 Should you Buy Now or Wait Calculator is a tool designed to empower you with the information you need to make informed financial choices.  

Typically, if you are putting less than a 20% down payment on a loan, the lenders require you to pay for mortgage insurance. This mortgage only protects the lender if you defaulted on the loan and offers no protection for you! In this case, the VA is paying for this prospection for the lender, because of your service. 

This insurance is called private mortgage insurance (PMI) for a conventional loan and a mortgage insurance premium (MIP) for an FHA loan.  

 A Federal Housing Administration-backed loan requires an upfront premium, or fee, of 1.75% of the loan amount. You can:

• Include that premium in your FHA closing costs, if you have the cash.
• Or you can roll it into your loan amount, which increases your monthly payments slightly because you're borrowing more.

In addition to the upfront premium, you’ll pay a monthly premium that is added to your mortgage payments. This fee varies from 0.45% to 1.05% of the loan amount per year. That can be a ton of extra money each month.

VA increases your Buying power

VA loans require neither a down payment nor mortgage insurance. That makes a VA-backed mortgage very affordable upfront and over time. You can always choose to have a down payment to lessen the cost of the mortgage if you choose to do so. See the different funding fees below if you choose to put more money down. 

Calculate what your VA mortgage would be.

The VA limits the closing costs lenders can charge to VA loan applicants. This is another way that a VA loan can be more affordable than other types of loans.  In the mortgage world, you’ll also hear these referred to as “settlement charges.” 

Get Pre-approved today

VA funding fee is normally wrapped into the loan; it does not add to the cash needed to close the loan.  Your closing costs will vary depending on a host of factors, from your lender and loan type to the location and more. With VA loans, this program actually limits what buyers can pay in closing costs. In fact, there are certain costs and fees that VA buyers aren’t allowed to pay.

The VA allows lenders to charge up to 1 percent of the loan amount to cover origination, processing, and underwriting costs. They can choose to either charge you a flat 1 percent origination fee or pick and choose among a host of fees, so long as they add up to no more than 1 percent. 

VA loan closing costs can average anywhere from 3 to 5 percent of the loan amount, but costs will vary depending on where you're buying, the lender you're working with, and more.

What if I don't have 3-5% for the closing cost?

 The other good news is that your Closing cost can be paid for by a Friend or family member if they are a gift! (Note a gift does not require repayment) 

The other option for VA buyers is to look to build the cost into the offer and have the seller pay for them at closing. You can’t just roll their other closing costs and fees on top of their loan. But you could, be buying a home at $200,000 and expecting about $5,000 in closing costs, you can offer the seller $205,000 and ask them to cover your costs and fees.

Assuming the home appraises, you might be able to avoid paying cash at closing to cover your costs and fees. The downside to this approach is that you’re borrowing more and paying more interest over the life of the loan. So, you will want to make sure you plan on being in the home for more than a couple of years. 

Money saved on closing costs can be used for moving costs, home improvements, or anything else you choose to do with the saved money! 

Home inspections are not required by the VA loan program but are still recommended.  

If the VA appraisal indicates any potential issues with the property our underwriters may

require an inspection, such as a roof or foundation inspection by a licensed contractor.

Termite inspections are normally required for VA loans. 

REQUIRED on all VA purchase loans except for new construction and some condos. The buyer can pay for it. The inspection must be reported on the Texas Official Wood Destroying Insect (WDI) Report with all sections completed and signed by the inspector. All outbuildings, sheds, or other structures MUST be included in the initial WDI report or a second trip will be required. 

All conducive conditions in the report must be corrected prior to closing with the exception of the following (depending on the lender):

high soil line, heavy foliage, wood-to-ground contact, and planter boxes or fences abutting the structure. Please send us all WDI reports and proof of treatment as well as all paid-in-full invoices.

REQUIRED on all VA purchase loans. We order the VA appraisal when the buyer or buyer’s agent gives us permission to do so. 

The VA appraisal is ordered through the VA portal and the VA randomly assigns a VA-approved appraiser. 

VA appraisals generally take about ten business days, not counting the date ordered. If the appraiser has trouble finding comps, he or she may issue a Tidewater Notice giving agents on both sides time to provide comparable sales supporting the sales price. 

Any required repairs must be completed and re-inspected by the appraiser prior to closing.

Va Loans Apprisal normally runs around $675 to $800 for single family Homes in Texas. 

Can I afford this Mortgage? Use our Mortgage Calculator.

The VA Loan usually has some type of disability and can get the Funding Fee waived. 

 The VA gives each disability a rating based on its severity if it is determined to be a service-connected disability. These ratings range from 0%-100%, with higher ratings yielding more VA compensation for a disability. 

Not everyone is required to pay the VA funding fee. In fact, some Veterans may have the fee waived entirely. The VA exempts specific borrowers from paying the funding fee on both purchase and refinance loans.

Those exempt from paying the VA funding fee include:

• Veterans who receive compensation for service-connected disabilities
• Veterans who would receive disability compensation if they didn't receive retirement pay
• Veterans rated as eligible to receive compensation based on a pre-discharge exam or review
• Veterans who can but are not receiving compensation because they're on active duty
• Purple Heart recipients
• Surviving spouses who are eligible for a VA loan

Your Certificate of Eligibility (COE) typically indicates if you're required to pay the VA funding fee. 

Also, note the funding Fee can be rolled into the loan amount!  

Normal funding associated with No Down payment First-time Funding fees are 2.15% for the first time and Subsequent VA Loan funding fee is 3.3%. 

These funding fees do change if you put more money down, if the down payment to 5%-9.9% the funding fee is 1.5%

Over 10% down payment funding fee is 1.25% 

Thinking about getting a Loan for a House?

How Do I Pay the VA Funding Fee?

VA buyers can pay the VA Funding Fee in one of the following ways:

1. Finance the VA funding fee over the life of the loan
2. Pay the fee out of pocket at closing
3. Ask the seller to pay the fee on their behalf

Typically, those required to pay the VA funding fee choose to finance it into the entire loan amount.

If 100% disabled due to service, the veterans are exempt from paying Property taxes. 

What is the amount of the disabled veteran's exemption? The exemption amount that a qualified disabled veteran receives depends on the veteran's disability rating from the branch of the armed service. 

                               Disability Exemption 

Disability Rating                          Exemption Amount Up To

10% to 29%                           $5,000 from the property's value

30% to 49%                           $7,500 from the property's value

50% to 69%                           $10,000 from the property's value

70% to 99%                         $12,000 from the property's value 

 Veterans with a full 100% disability rating are fully exempt from property taxes. 

 Requirements

• You must own your house and live in it as your primary residence
• The property address must match the address on your government-issued photo identification
• Receive 100% disability compensation from the U.S. Department of Veterans Affairs for a service-connected disability
• Have a disability rating of 100% or classified as an unemployable individual by the U.S. Department of Veterans Affairs

 Property Tax Exemption for Texas Disabled Vets!

Veterans can restore previously used VA entitlement benefits if they meet the requirements for restoring entitlement.  

In order for entitlement to be restored, the borrower must do some work.

1. Finish paying off your VA Loan

2. Selling the original property there in repaying their current VA loan in full, prior to purchase of a new home. (This can happen the same day, you can sell your home and close on the new home the same day!)

3. Have another Veteran assume your existing VA loan, and substitute their entitlement for yours (must be another veteran taking over your loan)

4. Refinance to another loan type that's a non-VA product. This could be with a conventional loan normally, but could also be FHA, or USDA as well. (This could allow you to keep your old home as a renter home and use your VA benefits again) 

You can get a Compromise Claim Restoration, there are no rules concerning the disposition of the first property once the loan has been paid in full, leaving it to be served as a rental property or vacation home without penalties or restrictions from the VA. 

If the Veteran has a compromised VA loan

Full Entitlement vs. Partial with VA loans

The purpose of the IRRRL Program is to help you refinance your existing VA Mortgage without having to re-qualify.  That means No income check and No appraisal are required.  IRRRL stands for Interest Rate Reduction Refinance Loan. The IRRRL is also known as The VA Streamline Loan. 

If you are going through a divorce, need to refinance your home, or pull out cash to remodel your home, give The Gifford Group a call. 

A VA-backed cash-out refinance loan may help you to:

• Take cash out of your home equity to pay off debt, pay for school, make home improvements, take care of other needs, or
• Refinance a non-VA loan into a VA-backed loan

What is the VA funding fee for the VA IRRRL?

Unless otherwise exempt, the VA funding fee for borrowers using the VA streamline refinance (IRRRL) is 0.5% regardless of service history or prior usage.

If you are thinking about this, give us a call! 

 If you have full entitlement, you don’t have a home loan limit

There are no Loan limits on VA loans!!!  As of January 1, 2020, there are no loan limits for VA loans of more than $144,000 if you have full entitlement.  

Does that mean you can get any size loan? Well, no, because you still have to qualify to pay back the loan, the lender will determine the size of the loan you can afford based on your:

• Credit history
• Income
• Assets (items of value such as savings, retirement, and investment accounts)

But my COE says " $36,000" is that my loan limit? 

No, that line on your COE is information for your lender. It shows that you have full entitlement. The $36,000 isn’t the total amount you can borrow. Instead, it means that if you default on a loan that’s under $144,000, the VA guarantees to your lender that we’ll pay them up to $36,000. 

For loans over $144,000, The VA guarantees to your lender that we’ll pay up to 25% of the loan amount. The VA does not limit how much you can borrow to finance a home.  

Correct and the Veteran must occupy within 60 days. VA loans are not available to finance an investment property, a vacation, or a second home.  

Also, the veterans must intend to occupy at the time of purchase, but NOTE, there are no limitations to convert it into a rental in 3,6,12 months later due to a change in circumstances. 

So, can the VA loan become a Rental? 

If you move into a house and later decide to buy another home and keep the VA loan purchase home as a rental property? There is no problem with VA lenders accepting this scenario, and veterans often buy another property and keep the rental income from it. Most often the rental income will cover more than the existing mortgage and can make a lot of sense.

Remember though just because you moved out doesn’t mean the loan is now considered an investment property. VA lenders approve loan applications based on the intent of the borrower at the time of application and not what might happen in the future. If you buy and immediately rent it out, there will likely be issues.

Lenders must comply with VA requirements, but there are also general guidelines that lenders can interpret. Additionally, individual VA lenders may have additional requirements beyond the VA. 

What are you deployed? 

The VA allows for a spouse to fulfill the occupancy requirement for an active-duty military member who is deployed or who cannot otherwise live at the property within a reasonable time, the 60-day rule. 

If you have questions about occupancy, talk to your VA lender.

If married note, that the VA requires both people to be on the loan application. 

Renting out your house for the first time? 

 The mortgage underwriters will make a thorough inspection of your loan application if your debt-to-income ratio is more than 41%. However, it does not mean that your VA loan application will be rejected straightway. You can still qualify for a VA loan under the following circumstances:  The DTI ratio is more than the permissible limit due to tax-free income.
The residual income surpasses the acceptable limit by around 20%. 

 While the VA doesn't mandate a maximum DTI ratio, it does set a dividing line for prospective borrowers.  

Some lenders might allow a DTI ratio above 50 percent, even well above it, in some cases, depending on the strength of the borrower's overall credit and lending profile. 

All VA appraisals are ordered through a VA (AMC) system for appraisal. Appraisal done for a VA loan has to be completed within 14 days (varies by state). Feedback is encouraged if you believe the appraisal is unprofessional, this will help keep the Appraiser honest and friendly. 

Value is determined by standard USPAP guidelines which is the golden standard for Appraisal purposes. There are the same guidelines used by FNMA, Ginnie, etc

Tidewater and "low Appraisals"

If your appraisal does come in low below the contract values, Real estate agents are given 2 business days to provide information in the relation to the appraisal. This can help if an appraiser is coming from Sugarland but doing an Appraisal for a home in The Woodlands and is uninformed about the area. 

If you are still unhappy with the appraisal, you can still dispute the value after the appraisal is complete. VA Staff will review and provide a reconsideration of value. 

Notice of value

 According to VA regulations, any property purchased with a VA loan must have an appraisal assigned by a VA-assigned appraiser. As a result of the notice of value, the VA is able to issue a VA loan amount for the purchase based on the fair market value.  According to VA loan rules, the length of time a notice of value is valid depends on the type of property being appraised. For example, proposed or under-construction properties have a 12-month period before the notice of value expires.  

If the borrower decides not to go through with the deal, the notice of value would be theoretically good for the full six months, unless market conditions dictate otherwise. That means a new VA borrower could possibly avoid having to pay an appraisal fee when trying to purchase a home where the notice of value is still valid.

The VA rules add some protection to the borrower who has agreed to purchase the property after the notice of value is issued. “If a veteran signs a purchase agreement during a notice of value’s validity period, that notice of value will remain valid until that transaction is either completed or terminated.”

 This can be a great option when selling in a rising interest rate environment. 

In a VA loan assumption, there is no requirement for you to be a veteran, but the seller's entitlement remains attached until the loan is repaid.  It's essential that a seller or spouse confirm that the new borrower has sufficient entitlements for a substitution.

If not, your VA entitlement would stay attached to this home and prevent you from using it elsewhere until the loan is repaid. You will need to provide the lender with a Certificate of Eligibility (COE) from the VA. 

Something to remember, Expect to pay the VA funding fee, again, which is 0.5% of the loan amount.

VA loans are not automatically assumed by some lenders. Requests must be sent to a VA loan office for review, and everyone involved in the sale must wait for the VA's response.

Bonus, we do have a local lender that can help you close on your new home very quickly. The average closing time on a VA loan with this local lender is only 22 days! 

FULL ENTITLEMENT

You might have full entitlement if any of the following is true-

• You have never used your VA loan benefits before. 
• You have paid the previous loan in full.
• You used your loan benefits to borrow a loan, had a foreclosure, but re-paid the amount in full.

Start here and figure out how much your mortgage will be and then we can help get you connected to a great local lender.  Begin your home search today and start using your VA loan benefits.  

Apply today

Thank you for your service! 

If you’re considering a VA loan, the first step is to get your VA home loan Certificate of Eligibility (COE). To get your COE, you’ll need military paperwork to apply.

• Veterans: Need their discharge and separation papers (DD214)
• Active-duty service members: Need a statement of service signed by their commander, adjutant, or personnel officer with the information the VA requests

You can find a full list of requirements based on your service in the US. Department of Veterans Affairs site.

 Can Divorce Support Income be Used for a Mortgage?

Get with a VA loan Lender to have them help you check your Certificate of Eligibility. 

 The National Association of REALTORS® and the Department of Veterans Affairs recently launched a joint video series for REALTORS® to help more veterans and active-duty buyers purchase a home using VA loans. The two-part series aims to dispel misconceptions about the VA Home Loan Guaranty Program and guide REALTORS® and buyers through the process. 

Also, if you have a home, you can buy a new home before you list your home for sale, see  

Can you still get a Loan if I was General Discharged? Yes 

How to Apply for a Discharge Upgrade

Read more about MUD Taxes (FYI, Houston Has the Most MUDs Taxes) 

What About Property Taxes? 

LONG TERM CAPITAL GAINS TAX ON REAL ESTATE

TheGiffordGroup.net - "Opening Doors To New Beginnings"  

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