If you are active-duty military, a veteran or a surviving military spouse, you may be eligible to get a VA home loan. The VA’s home loan program is … Read More
There are several benefits program under the VA loan program. First, there are loans to help eligible veterans or surviving spouses purchase a home. … Read More
To be eligible for a VA home loan, the veteran must meet certain requirements. To purchase or cash out refinance, the money must be used for a home in … Read More
Get Your VA Approved
Many military veterans are unsure whether they can use their VA loan entitlement for home improvements. According to the Veterans Administration, veterans who qualify for the VA Home Loan Guarantee Program can finance certain energy-efficient improvements.
Costs of the improvements may be rolled into their new home loans. The VA does, however, have some restrictions in place. One is regarding the types of improvements. Another is the amount that can be borrowed to complete those improvements.
Energy-Efficient Home Improvements
The VA will allow veterans to finance certain energy-efficient improvements so long as they use the money for those improvements. Here is a short list of energy-efficient improvements veterans are allowed to complete by rolling the costs into their new home loan:
• Solar heating and cooling installation
• Storm door and window installation
• Installing energy-efficient insulation
• Purchasing an energy-efficient furnace
• Any energy-efficient improvements that lower the cost of utilities
Veterans can borrow an additional $6,000 on top of the financing needed to purchase a home to complete energy-efficient home improvements without the need for a separate appraisal. For any improvements that are $3,000 or less, the VA does not require any additional documentation except for the receipts for the improvements.
VA Construction Loans
The VA does offer construction loan programs. These allow veterans to acquire and rehab a home or to construct a new home. Applying for a construction loan is the same as applying for any other VA home loan program. However, many lenders in today’s mortgage market are unwilling to approve construction loans. Although a veterans’ VA loan entitlement guarantees the VA will back the home loan, the lender still must approve the loan. Many veterans are unaware the VA does not provide the actual financing but provides insurance to lenders in the event borrowers default on their mortgages.
VA Home Equity Loans/Cash-Out Refinances
The VA allows veterans who have first liens on their homes to apply for home equity loans or cash-out refinances. If lenders approve the loan, the money can be used for home improvements. Veterans must have first liens on their homes and do not qualify for cash-out refinances if they own their homes outright. According to the VA’s Lender’s Handbook, a veteran may use their VA loan entitlement to refinance any first lien secured against the property, including conventional mortgages. Any loan proceeds beyond the total needed to pay off the first lien may be used by the borrower for any purpose acceptable by the lender.
But what happens when a veteran and his or her spouse divorce but still have a VA loan? This is where good information proves immensely helpful.
A Veterans Administration loan is more commonly known as a VA loan. It is provided as a benefit to veterans of the United States Armed Forces.
Veterans and their spouses may take out a VA loan but the veteran must be listed first on the loan and must be listed first on the title to the home. Only their respective spouse may be on the loan or share title with the veteran. No parent, significant other, fiancée, or anyone other than the spouse is eligible.
Divorce – Who Keeps the VA Loan?
In the event that a veteran and his or her spouse dissolve their marriage, the party awarded the home is typically also awarded the debt associated with it. Sometimes the divorce decree requires that person to refinance the loan and title to the home into his or her own name. If the veteran is the person awarded the home, he or she can obtain a VA refinance through his or her lender. A copy of the decree must be provided so that the ex-spouse can be removed from the title. The ex-spouse will have a document or two that requires signing. This differs from state-to-state.
Purchasing Another Home
One question lenders are often asked is “Can I purchase another house utilizing my VA benefit if my ex-spouse kept the house and the VA loan associated with it?” It depends on how much of your entitlement remains from the first VA loan. But the VA does allow two VA loans at the same time. This is known as second-tier entitlement. So long as the veteran’s maximum entitlement is not exceeded with the first loan, the veteran may be able to use VA financing to purchase another home.
Restoring VA Loan Entitlement
If the veteran and ex-spouse sell the marital home, pay off the VA loan, or refinance to a non-VA loan, restoration of the entitlement should happen right away. Then when he or she wants to purchase another home by re-utilizing their VA benefit, they can work with their current lender to make sure the restoration is in place so the veteran can finance their new home.
You have served the country and now it is time to put some of those hard-earned benefits to good use. One way the government has set out to help veterans is with respect to home ownership or purchase land using VA loan.
A VA loan is a great way to find the capital needed to get into a home that will provide for the safety and security of your family for years to come. However, these loans come with certain stipulations that must be met before the money can be used.
Many people rightfully question if the loan can be used for the purchase of land itself. There is good news on this front. But, once again, certain conditions must be met. This post will address those issues.
Is It Possible to Purchase Land Using VA Loan?
It Comes Down to the House
If you are looking to use this type of a loan to buy land, you will need to show that you have plans to build a house on it right away. That is pretty much the only major stipulation on the deal.
However, keep in mind that all the other guidelines governing this program still exist as well. It is true that most veterans use the program to purchase an existing stand-alone single-family house or condominium. There is much more flexibility built into this type of mortgage.
First, secure a firm contract to build a home on an existing piece of land. Then work with a VA lender to include the purchase of the entire property into the deal.
Purchase Land Using VA Loan: Eligibility Requirements
To become eligible for a VA loan, a veteran personally must occupy the home for a certain length of time. This precludes you from purchasing a home specifically for rental purposes. However, it does not mean a home must be finished at the time the loan is closed.
VA rules stipulate that you can buy land and then proceed to build the home on it. You’ll want to pay careful attention at this point The following types of homes and construction types will qualify under the program:
- Newly Constructed Homes
- Pre-Fabricated Homes
- Mobile Homes Under Certain Situations
If you do wish to place a mobile home on your purchase land, it is important to keep in mind that the VA requires a permanent foundation be present. This is because the American taxpayer is the guarantor for the loan. And the program is not designed to allow for the possibility of a vacant lot to be foreclosed upon.
Herein lies the key. If you can prove that you are going to have a home on the land, and you can produce the documents to this effect, you may qualify for financing so long as all other VA requirements are met. Not all lenders will be willing to finance this deal. Particularly if you are looking to put a prefabricated home on the lot. Be sure to shop around until you find one that does.
The VA loan entitlement program, originally passed in 1944 as the Servicemen’s Readjustment Act, was intended to help returning service members obtain a mortgage to purchase a home. It has expanded to include a wider range of veterans, including National Guard members and Reservists.
VA Loan Entitlement
VA loans are not made by the federal government. Rather, the government guarantees a financial institution that a specific amount of the loan will be repaid if the loan goes into default. As with any mortgage, it’s prudent to shop for the best rates and terms.
The applicant may opt out of paying points and other closing costs on a VA loan but this must be negotiated with the buyer, the seller, and the lender. Although applicants may be required to pay a funding fee, they will have the option of including this in the loan if they prefer. Some veterans will not have to pay a funding fee if they:
- Have a service-connected disability and are receiving a stipend for it.
- Have a service-connected disability but are active duty or retired.
- Are a surviving spouse.
- Currently, those who have served from WWII to the present are eligible for a VA loan entitlement. Service need not have been in a war zone but there are minimum length-of-service requirements and the discharge must have been other than dishonorable.
- Surviving spouses who have not remarried are eligible if the veteran was killed in action or died from injuries sustained in service.
- Surviving spouses over 57 years old can be remarried.
- Surviving spouses of 100 percent disabled veterans can be eligible.
- Veterans or surviving spouses must have credit and income sufficient to qualify for the loan.
- The VA loan must be for a primary residence, not a rental or second home.
How to Determine Eligibility
To apply for a VA loan, the applicant will need a Certificate of Eligibility, or COE, from the Department of Veterans Affairs. This can be done online or through the lender. The veteran or applicant will need a copy of the DD-214 for both online and in-person requests. Additional information may be required for surviving spouses, and specifics can be obtained at the Department of Veterans Affairs website.
Reusing VA Entitlement
Under certain circumstances, a veteran’s VA loan entitlement can be used more than once. To do this, the first VA loan must have been paid in full. Borrowers can apply to use their eligibility to purchase another home as long as the first loan was satisfied and the borrower intends to use the new home as a primary residence.
Veterans or surviving spouses who didn’t use their entire entitlement and have a balance remaining can use that balance on another home.
If the VA has no proof of the disposition of a home, they may not allow restoration of the entitlement even if they have proof that the previous loan was paid off.
Additional information on all of the above can be found at the Department of Veterans Affairs by clicking on the menu to the left.
Many people will be looking for a new home within the next year. However, when buying a new home, you will probably need to obtain a loan to finance the purchase. One type of home loan that is available is a VA loan. There are numerous VA loan advantages in 2017.
VA Loan Advantages
What is a VA Loan?
Veterans Affairs mortgages, known as the VA, are becoming increasingly more popular. These loans are offered to people who are actively serving in the military or individuals who are military veterans. The mortgage is backed by the United States government and they are funded by private lenders. Now is a very good time to buy a home or refinance an existing mortgage with a VA loan.
Eligibility for a VA Loan
One of the advantages of VA home loans in 2017 is that the requirements are more lenient than with other types of home loans. ***The VA looks at the big picture not just your credit score. And, although there is no established minimum score requirement, lenders do like for you to have a credit score of at least 620. Another benefit is that mortgage insurance is not required. For qualification purposes, you must be a member of the US military, a veteran, a reservist, or a member of the National Guard. If you are a spouse of a service member who lost his or her life while on active duty, you might also be eligible. You will need to provide proof that you can repay the loan. The loan must be used on your primary residence; it cannot be used to finance a vacation home.
VA Loan Advantages
A major advantage of a VA home loan in 2017 is that you are not required to make a down payment. This can save you money. Most other types of loans require a 20% down payment. In addition to no down payment, you can qualify for the loan even if bankruptcy is in your history. VA loans will offer you the most competitive interest rates in the market and, because it is backed by the VA, the loan is less risky for lenders. You can also pay off the mortgage at any time without a prepayment penalty.
Another big advantage of a VA home loan in 2017 is that there are limits on closing costs. Some of the fees must be paid by other parties. Furthermore, the costs that you are required to pay can be rolled into the loan, so you do not need to bring any money with you at the closing. You are not required to repay the loan in full to be able to obtain another VA loan.
The year 2017 will be a great year in the mortgage industry. You can apply for a VA loan confident that your mortgage will have the benefits you deserve. You can then enjoy the privileges that come with home ownership.