5 Roadblocks To Obtaining a VA Home Loan
VA home loans, an offering of the U.S. Department of Veterans Affairs, has enabled thousands of veterans and active servicemembers to buy a home. There are, however, certain requirements that you need to take care of in order to ensure you get all the benefits of this home loan program, no matter whether you are in Texas or any other part of the US. On that note, let’s take a look at some of the key elements you need to know, before you apply for a VA home loan.
1. Minimum Residual Income
Minimum residual income varies from state to state and as per the family size. Simply put, it is the amount that you are left with after addressing your monthly expenses. The DVA considers your residual income to determine whether you have the financial bandwidth to manage your loan payments. It helps the lenders to confirm that veterans are purchasing affordable homes, which makes the program one of the safest types of mortgages, despite zero down payment.
2. Property Purpose
According to the DVA, you can secure a VA home loan in Texas or any other part of the US, only to purchase a property that you will use as your primary residence. The VA benefit cannot be utilized for securing vacation homes or rental properties. This requirement, however, does not restrict you to rent a part of your home. In fact many people rent a part of their property after receiving a Permanent Change of Station or PCS order.
3. Credit Score Requirement
Just the way there is no minimum required, veterans are not required to maintain a minimum credit score to get the VA home loan. It is good to remember; however, that the Department of Veteran Affairs does not finance your loan but the lenders. Therefore, to minimize their risks, usually prefer candidates with a better credit score. Most lenders require a credit score of 620 or more. This, however, does not imply that you cannot secure a VA loan if yours is below the 620 mark.
4. Mobile Home Financing
Financing a mobile or manufactured home through VA-approved lenders might be a challenge, as many lenders do not sanction mortgage for mobile assets. Though you can always begin the search for a suitable lender with any web search engine, the safest way forward is to speak to a VA loan expert.
5. Minimum Property Requirement
Unlike homes secured through conventional loans, homes secured through VA loans come with a Minimum Property Requirement or MPR, which is there in place to ensure that the chosen property is ready to move in and safe for occupation. A VA-certified appraiser evaluates the property and informs the lender about its market value and other findings. This property check, however, is not too comprehensive, as it is carried to ensure that property is in a decent, livable condition.
The VA loan program, a government initiative to help military people realize their dream of homeownership, offers numerous benefits for the borrowers. However, in addition to the funding fee that is a prerequisite of the program; there are certain requirements that veterans must fulfill before they can secure a home loan from a VA approved lender. Therefore, it is essential to partner with a knowledgeable real estate agent and mortgage expert to avoid these roadblocks that could prevent you from obtaining a VA loan .
If you live in Texas and wish to know more about VA loans and their requirements, feel free to call us, or fill out our contact form and we will take it from there.