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Monday 11/20/2017 Mortgage Rates

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VA Loan Eligibility and Benefits

As a thank-you to the dedicated men and women who serve our great nation, the U.S. Department of Veterans Affairs devotes their loan program to ease the path of owning a home for our fellow veterans, active military personnel, and their families.

You only need to meet one of the VA loan requirements listed below for you to get started.

You qualify for a VA loan if:

  • You served 90 successive days during times of war.
  • You served 181 successive days during times of peace.
  • You served more than 6 years with Reserves or the National Guard.
  • You are the wife or husband to a service member that died in the line of duty due to a service-related disability.

Certificate of Eligibility (COE)

After meeting the service-related conditions for eligibility, the next step would be to receive a Certificate of Eligibility (COE) that's available from lenders approved by the VA. You do not need a COE to start the loan process, but you do need to have it present before signing on the dotted line.

To make things quicker for you, the VA suggests that eligible candidates sign up with the Web LGY online database, which allows VA approved lenders to look through your COE without a hassle.

Proof of a Stable Income

Where conventional loans require a 36% debt-to-income (DTI) ratio, VA loans require as much as 44%. The purpose of this is to reduce risk on the part of the lender and the borrower (you). However, the lower your DTI, the better the deals will be for you because if your debt and expenses put too much pressure on your income, you may risk foreclosure in the future. 

The Benefits of a VA Loan

  • 0% down payment.
    Conventional loans admit qualified candidates only if they can contribute a 20% down payment. Here, you can save many thousands of dollars and focus on building your home equity which you can later convert into funds if you wish to make a larger contribution and bring your rates and outstanding balance down.
  • No insurance required.
    Private mortgage insurance is a necessity with other loans - such as with an FHA loan - to reduce the risk for the lender. 
  • Better allowance.
    With no insurance dispersed in the form of interest costs on top of your monthly payments, you'll have hundreds of dollars worth of savings and a better monthly allowance.

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