As a team at 1st United Mortgage, we take great pride in assisting military personnel and veterans in achieving their dream of homeownership. The VA home loan program is one of the most significant benefits of military service, and we want to ensure that you have all the necessary information before you apply for this exclusive home loan benefit. In this blog, we will share some essential things you need to know before applying for a VA home loan in 2023.
Understanding the VA Home Loan Program
The VA home loan program was established in 1944 as a way to assist veterans in achieving homeownership after returning from World War II. Since then, the program has evolved, and now, it is one of the most attractive mortgage options for eligible military personnel and veterans.
VA home loans are issued by private lenders and are partially guaranteed by the U.S. Department of Veterans Affairs. This means that if the borrower defaults on the loan, the VA will reimburse the lender a portion of the loss.
Eligibility Requirements for VA Home Loans
To qualify for a VA home loan, you must meet the eligibility requirements set forth by the VA. Generally, these requirements include:
- Serving on active duty for a certain period
- Being an honorably discharged veteran
- Being the surviving spouse of a service member who died in the line of duty or as a result of a service-related disability
The length of service required depends on when you served, and it can range from 90 days to two years or more.
Credit Score and Income Requirements
The VA home loan program is more forgiving when it comes to credit score requirements than conventional mortgages. However, you still need to have a decent credit score to qualify. The VA does not set a minimum credit score requirement, but most lenders will require a score of at least 620.
As for income requirements, the VA does not set a specific minimum income requirement. However, lenders will evaluate your income to ensure that you can afford to repay the loan.
Certificate of Eligibility (COE)
Before you can apply for a VA home loan, you will need to obtain a Certificate of Eligibility (COE) from the VA. The COE proves to the lender that you are eligible for the VA home loan program.
You can obtain your COE online through the VA’s eBenefits portal, or you can request a copy from your lender. To get your COE, you will need to provide some basic information, such as your military service history.
One of the unique features of the VA home loan program is the funding fee. The funding fee is a one-time fee charged by the VA that helps offset the cost of the program. The fee can vary depending on factors such as your down payment amount and your military status.
The funding fee is typically added to your loan amount, so you do not have to pay it out of pocket at closing. However, it will increase your overall loan amount and your monthly mortgage payment.
VA Home Loan Limits
The VA home loan program does not have a specific loan limit. However, there are limits to the amount of liability the VA will assume, which can affect the amount you can borrow.
In most parts of the country, the VA will guarantee up to 25% of the loan amount, with a maximum guaranty amount of $548,250. However, in high-cost areas, the guaranty amount can be higher.
Working with a VA-Approved Lender
When applying for a VA home loan, it is crucial to work with a lender that is approved by the VA. VA-approved lenders have experience working with the VA home loan program and can help guide you through the process.
At 1st United Mortgage, we are proud to be a VA-approved lender. Our team of experts has extensive experience working with the VA home loan program and can provide you with the guidance and support you need to make informed decisions.
Get In Touch With 1st United Mortgage Today
If you are a military member or veteran looking to purchase a home, a VA home loan can be an excellent option. However, before you apply for a VA home loan in 2023, it is crucial to understand the eligibility requirements, credit score and income requirements, the certificate of eligibility, funding fee, VA home loan limits, and the importance of working with a VA-approved lender.
At 1st United Mortgage, we understand the unique needs of military personnel and veterans, and we are committed to helping you achieve your homeownership goals. Contact us today to learn more about the VA home loan program and how we can help you get started on your journey towards homeownership.