| |
 Veterans Administration
Loans
With
more than 25.5 million veterans and service personnel
eligible for VA financing, this loan is attractive and has
many advantages. Eligibility for the VA loan is defined as
Veterans who served on active duty and have a discharge
other than dishonorable after a minimum of 90 days of
service during wartime or a minimum of 181 continuous days
during peacetime. There is a two-year requirement if the
veteran enlisted and began service after September 7, 1980
or was an officer and began service after October 16,
1981. There is a six-year requirement for National guards
and reservists with certain criteria and there are
specific rules concerning the eligibility of surviving
spouses.
VA will guarantee a maximum of 25 percent of a home loan
amount up to $89,912, which limits the maximum loan amount
to $359,650. Generally, the reasonable value of the
property or the purchase price, whichever is less, plus
the funding fee may be borrowed. In other words, VA Loans
are a great way to obtain 100% financing without the
hassle of private mortgage insurance for very favorable
terms.
All veterans must qualify, for they are not automatically
eligible for the program. These loans allow for past
credit issues as long as they have been improved and/or
resolved in the past 12 months and at a very reasonable
interest rate. There are debt to income requirements that
must be met unless there are strong compensating factors
that may influence otherwise such as:
-
Excellent credit history
-
Conservative use of consumer credit
-
Minimal consumer debt
-
Long-term employment
-
Significant liquid assets
-
Military benefits and more
The veteran can
pay a maximum of all reasonable and customary amounts for
any and all of the "Itemized Fees and Charges" designated
by VA as defined below plus a 1% flat charge by the lender
plus reasonable discount points. Some special provisions
apply to construction, alteration, improvement and repair
loans.
The VA defines allowable fees and charges that the veteran
borrower can pay or closing costs that may be charged to
the borrower. These costs are determined as reasonable and
customary by each local VA office. All other costs in the
transaction are considered non-allowable and generally
paid by the seller when purchasing a new home or by the
lender when refinancing your current VA mortgage. All
other costs in the transaction are considered
non-allowable and generally paid by the seller when
purchasing a new home or by the lender when refinancing
your current VA mortgage. Itemized fees and charges are as
follows:
APPRAISAL AND COMPLIANCE INSPECTIONS
The veteran can pay the fee of a VA Appraiser and VA
compliance inspectors. The veteran can also pay for a
second appraisal if they are requesting a reconsideration
of value. The veteran cannot pay for a second appraisal if
the lender or seller is requesting a reconsideration of
value or if parties other than the veteran or lender
request the appraisal.
RECORDING FEES
The veteran can pay for recording fees and recording taxes
or other charges incident to recordation.
CREDIT REPORT
The veteran can pay for the credit report obtained by the
lender.
PREPAID ITEMS
The veteran can pay that portion of taxes, assessments,
and similar items for the current year chargeable to the
borrower and the initial deposit for the tax and insurance
account.
HAZARD INSURANCE
The veteran can pay for the hazard insurance premium. This
includes flood insurance, if required.
FLOOD ZONE DETERMINATION
The veteran can pay the actual amount charged for a
determination of whether a property is in a special flood
hazard area, if made by a third party who guarantees the
accuracy of the determination.
SURVEY
The veteran can pay a charge for a survey, if required by
the lender.
TITLE EXAMINATION AND TITLE INSURANCE
The veteran may pay a fee for title examination and title
insurance, if any. If the lender decides that an
environmental protection lien endorsement to a title
policy is needed, the cost of the endorsement may be
charged to the veteran.
SPECIAL MAILING FEES FOR REFINANCING LOANS
For refinancing loans only, the veteran can pay charges
for Express Mail or a similar service when the saved per
diem interest cost to the veteran will exceed the cost of
the special handling.
VA FUNDING FEE
Unless exempt from the fee (10% minimum disability from
the VA), each veteran must pay a funding fee to VA.
OTHER FEES AUTHORIZED BY THE VA
Additional fees attributable to local variances may be
charged to the veteran only if specifically authorized by
VA. The lender may request VA to approve such a fee if it
is, (a) normally paid by the borrower in a particular
jurisdiction, and (b) considered reasonable and customary
in the jurisdiction.
The following list provides examples of items that CANNOT
be charged to the veteran as "itemized fees and charges."
Instead, the lender must cover any cost of these items out
of its flat 1% fee.
Loan closing or settlement fees, document preparation
fees, preparing loan papers or conveyance fees, attorneys
services other than for title work, photographs, interest
rate lock - in fees, postage and other mailing charges,
stationery, telephone calls and other overhead,
amortization schedules, pass books, and membership or
entrance fees, escrow fees or charges, notary fees,
preparation and assignment of mortgage to other secondary
market purchasers, trustee's fees or charges, loan
application or processing fees, fees for preparation of
truth-in-lending disclosure statement, fees charges by
loan brokers, finders or other third parties, and tax
service fees.
When reviewing allowable borrower fees and charges, many
of the items can be paid for by the seller of the home and
can be negotiable when presenting an offer on a home to
the seller. Please consult with your Real Estate
Professional handling the transaction.
Overall, these loans are a great way to
obtain low interest rates with very low closing costs. If
you would like more information about these loans, please
contact our office at 877-347-8175.
|
|
