How to Know if You are Eligible for a VA Loan .pdf
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How to Know if You are Eligible
for a VA Loan
Facts About VA Loan Eligibility
For new homebuyers, one of the most arduous processes can be figuring out how to
pay for their new house. There are many options for loans but how do you know which
one is right for you? If you’re a United States veteran, a loan through the Department of
Veterans Affairs is the best choice for a home loan you can make, as it is specifically
designed for you and in most circumstances, requires no down payment. One can apply
for a VA Loan eligibility with any lender that has a program for VA home loan.
Barring a few special circumstances (discharge due to hardship, service-connected
disability, surviving spouses of veterans), VA loans are for veterans, military personnel
currently on active duty National Guard & Selected Reserve members. The VA website
offers minimum service requirements and qualifying dates for each status. Once that
has been established, and you have found a home you desire to purchase, you will
need to apply for a VA Loan Eligibility certificate.
Once approved, speak with a lender at a financial institution such as a bank or
Though VA loans are meant for military personnel, that doesn’t mean you are
automatically entitled to one. Just like any other loan, you will be approved or declined
based on your current financial status. Factors such as a bad credit rating or a previous
bankruptcy will hurt your chances for approval.
If you filed for bankruptcy, that doesn’t mean you have completely forfeited your chance
of being eligible for a VA home loan.
There are several circumstances that could have it disregarded. For instance, if your
bankruptcy was discharged over two years ago, or if you have brought your credit back
up to an acceptable rating and the circumstances that lead to the bankruptcy were out
of your control, such as medical bills and/or being out of work. If your bankruptcy filing
was discharged in the last year, then it is best to wait for another year or so. Otherwise,
your lender is more likely than not to decline you.
In most circumstances, there is no down payment required for a VA home loan for the property
itself. However, sometimes a lender might require it. There may also be one required if the
purchase payment is larger than the reasonable value of the property. Some payments are
guaranteed, as there will be a VA funding fee. Required by law, the VA funding fee lessens the
burden on other taxpayers for the VA home loan program.
If you are applying for a VA home loan for a second time and are not making a down
payment on your home, your funding fee will be higher, by a bit.
The reason being that the reduced fee is more intended for first-time buyers and the
time in between purchasing your first and second time should be adequate to save for
the funding fee. If you are making a down payment, this can be reduced based on the
percentage of said down payment. VA home loans are an excellent choice for veterans
in good financial standing looking for a home.