Are You Eligible For A Hawaii VA Loan?
You don’t need perfect credit to qualify for a VA Loan. Each lender is different when it comes to what is an acceptable credit score, but most require a 620 minimum score. Lenders are also going to pull your credit report. This report will show outstanding debts you have with a wide variety of businesses, INCLUDING HOSPITAL BILLS. Many people believe that a delinquent hospital bill will not affect your credit, but that is false. If you have had those dreaded calls from debt collectors, don't worry that does not mean you’re disqualified, but lenders need to feel confident that you can get on top of your credit.
To improve your odds of receiving a loan, you will want to have a long employment history, showing that you have a steady income. There are circumstances that will allow a loan to be approved without a long history of employment, but you will need a good explanation and documentation to support it.
You will need to show that not only do you have an income, but that you also have money left over after payment of your mortgage and all bills. This is called your residual income.
Below are the basic eligibility requirements for your VA Loan:
• 90 days or more active duty service during wartime.
• 181 days or more of active duty during peacetime.
• You are active duty and meet the above requirements.
• You are the surviving spouse of a veteran who died during service or because of service-related injuries and you have not remarried.
• You were not dishonorably discharged.
If you’re a member of a military reserve, you will need six years of service and an honorable discharge or have been deployed for 90 days or more in a combat zone, and then you may will be eligible for a VA Loan. If you are not sure if you will qualify, the following website can help: http://www.homeloans.va.gov/eligibility.htm
Ok great, you are eligible for a VA loan, but are you qualified?
The best way to determine your eligibility is contacting a VA Approved lender who will ask you a series of questions and pull a credit report on you. If you qualify, you will be told how much you qualify for, and advise you of your options. You will need a credit score of 620 or higher and have no bankruptcies for two years. If your credit score is too low, don’t worry, there is still hope! There is a department of secondary approval that is dedicated to getting your credit score where it needs to be to qualify.
No down payment necessary for VA Loans! Save your money and put it towards your monthly payments or remodeling your kitchen. Most 100% financing programs are no longer offered and lenders are now requiring 10-20 percent down payment in order to qualify for financing without mortgage insurance.
Reduced Closing Costs
Closing Costs are never easy to manage. Thanks to the VA, Veterans have a good chunk of these costs waived. These savings can add up to over $2,000. Conventional loans do not offer this kind of assistance.
Less Qualifying Restrictions
Due to the housing market today, lenders have greatly increased their mortgage restrictions. This has made it much more difficult for potential home buyers to qualify for a mortgage. Thankfully, people who are eligible for VA loans will not experience these restrictions. For that reason, you will have the best chance to getting qualified for your VA Loan.
No need for Mortgage Insurance
A conventional mortgage requires the borrower to pay for Private Mortgage Insurance (PMI) unless there is a down payment of at least a 20%. With VA Loans a home buyer does not pay for Private Mortgage Insurance. This can save you around $3000 a year!
Top Dollar Loans!
On Oahu, you can borrow up to $741,250 with no down payment!! ($625,500 on Maui, Kauai & Big Island). If you do put a down payment on a home, you may even qualify for a VA loan amount up to $1,000,000.
Refinancing, at low, or no cost to you
As a VA mortgage holder, you automatically qualify for the “Interest Rate Reduction Refinance Loan” (IRL). For more information on that go to:http://www.benefits.va.gov/homeloans/irrrl.asp
Get your Certificate of Eligibility!
If you are confident that you will qualify for a VA Loan, you will need to get your Certificate of Eligibility. You will want this certificate before you place your first bid on a home. You can obtain this form from VA directly or from your VA Loan Officer.
Ready to buy a home, but still not sure how to handle the VA? Well give me a call today and I will be more then happy to work with you and the VA to get you the best loan possible!
Cory Beadle, Realtor(S)
Cory at FindingHawaii.com
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