VA - Veteran Mortgages
If you've served our country you have access to one of the most favorable loan programs on the market. These 0%-down loans come with lower interest rates and are open to first-time home buyers. The VA program makes refinancing loans available as well.
A&M Mortgage Group can guide you through the qualification process so it all goes smoothly.
To qualify for a VA loan you will first have to obtain a certificate of eligibility. This COE will prove you meet one of the following requirements:
At least 90 consecutive days of active wartime service.
At least 181 days of active peacetime service.
6+ years of service in the National Guard or Reserves.
You can also apply for a VA loan if you're the spouse of a service member who died or became disabled in the line of duty, so long as you have not remarried.
If you're in the military you can use your Basic Allowance for Housing (BAH) to help qualify. There are no hard and fast income requirements, but you do need income stability.
How do lenders determine income stability?
You'd subtract your new mortgage amount from your current monthly paycheck, including your housing allowance. Everything left over is called "residual income," and it's meant to pay for food, transportation, clothes, and all the other family needs.
Most of the lenders who offer VA loans require you to have at least a 620 FICO score. The lender also examines your debt-to-income ratio, which should be no higher than 41%.
You can get this number by multiplying your monthly income by 0.41%. That's your debt limit. Then, add up all your other monthly obligations: car loans, student loans, personal loans, and credit cards. If the result is lower than the limit, you can qualify.
Some veterans have been able to get a loan even if they don't quite meet the 41% DTI requirement, but you will definitely require the help of an expert Mortgage Loan Originator to do it. I have to help you make a case to the lender that you can still pay the loan even if your DTI is high. This is usually possible if your residual income is about 20% higher than required.
Of course, if your DTI is a little high there's an easy solution: pay off one of your obligations to get rid of the monthly payment.
As mentioned, VA loans tend to come with lower interest rates. They can be up to 1% lower than conventional mortgage rates, which can translate into big savings on your monthly payments. You also are not required to purchase private mortgage insurance.
These loans have one of the lowest foreclosure rates in the nation because they're structured so well. If you are eligible, taking advantage of them is a smart choice.
Contact me today to get started, or any member of my team here at A&M Mortgage group. We appreciate your service, and look forward to getting to know you.