{"id":4039,"date":"2024-10-11T10:42:08","date_gmt":"2024-10-11T15:42:08","guid":{"rendered":"https:\/\/tomo.com\/blog\/?p=4039"},"modified":"2024-10-11T10:42:27","modified_gmt":"2024-10-11T15:42:27","slug":"who-can-get-in-on-a-va-loan","status":"publish","type":"post","link":"https:\/\/tomo.com\/blog\/who-can-get-in-on-a-va-loan\/","title":{"rendered":"Who can get in on a VA loan?"},"content":{"rendered":"\n<p>A VA loan is a mortgage loan backed by the U.S. Department of Veterans Affairs (VA). Its primary purpose is to help veterans, active-duty service members, and eligible spouses secure home financing with favorable terms. VA loans offer benefits like zero down payment, <a href=\"https:\/\/tomo.com\/mortgage\/rates?utm_source=tomo_blog\" title=\"competitive interest rates\">competitive interest rates<\/a>, and no <a href=\"https:\/\/tomo.com\/blog\/what-is-pmi\/\" title=\"private mortgage insurance (PMI)\">private mortgage insurance (PMI)<\/a>, making them a strong choice for eligible borrowers.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Are VA loans assumable?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p><strong>Yes<\/strong>: Even if you\u2019re not a military member, you can still take advantage of certain VA loan benefits. In fact, <strong>you can assume a VA loan<\/strong>, even if you have no connection to the military, as long as the lender agrees. This is a unique opportunity for homebuyers, as many VA loans feature low-interest rates (often below 3%), which can be a huge money-saver, especially in today\u2019s high-interest environment.&nbsp;<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Can I put no money down on a VA home loan?\u00a0<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>Yes, you can often put no money down on a VA home loan. Here\u2019s how it works:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>VA&#8217;s Role: The VA doesn\u2019t actually give you the loan. Instead, it guarantees part of the loan amount to the lender. This guarantee helps you get a better deal, like no down payment.<\/li>\n\n\n\n<li>Full Entitlement: If you have full entitlement (meaning you haven\u2019t used your VA benefits before or you\u2019ve paid off previous loans), the VA will back up to 25% of your loan. This means you can borrow as much as the lender will approve without needing a down payment, as long as the sale price doesn\u2019t go over the appraised value of the home.<\/li>\n\n\n\n<li>Loan Amounts: For loans over $144,000, the VA guarantees 25% of the loan. For loans of $144,000 or less, the guarantee is $36,000.<\/li>\n\n\n\n<li>Partial Entitlement: If you\u2019ve used some of your VA benefits before or have other VA loans, your entitlement might be partial. In this case, you might need to make a down payment if you\u2019re borrowing more than what your remaining entitlement covers.<\/li>\n\n\n\n<li>Certificate of Eligibility (COE): This document shows how much entitlement you have left and helps lenders understand your VA loan benefits.<\/li>\n<\/ul>\n\n\n\n<p>In short, for most people with full entitlement, the VA guarantee allows for no down payment if the lender approves the loan amount and the home\u2019s price is within the appraised value.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How do I use a VA entitlement calculator?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>A <a href=\"https:\/\/lgy.va.gov\/lgyhub\/guaranty-calculator\">VA entitlement calculato<\/a>r helps determine how much you can borrow under the VA loan program based on your entitlement. This tool considers your service record and any previous use of VA benefits.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What\u2019s the difference between VA entitlement, the VA 25% guarantee and VA loan limits?\u00a0<\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Term<\/td><td>What it means<\/td><td>Example<\/td><\/tr><tr><td>VA Entitlement<\/td><td>The amount the VA is willing to guarantee for your loan based on your service and previous use of benefits.<\/td><td>If you haven&#8217;t used your full entitlement, you can borrow more. If you\u2019ve used some, it might be less.<\/td><\/tr><tr><td>VA&#8217;s 25% Guarantee<\/td><td>The VA guarantees 25% of your loan to protect the lender if you default.<\/td><td>For a $300,000 loan, the VA guarantees $75,000 (25%).<br><\/td><\/tr><tr><td>VA Loan Limits<\/td><td>The max loan amount allowed, based on where you&#8217;re buying. The limit changes depending on the area.<br><\/td><td>In expensive places like <a href=\"https:\/\/tomo.com\/mortgage\/rates\/va-loans\/seattle-wa?utm_source=tomo_blog\" title=\"Seattle\">Seattle<\/a>, the limit could be $1.2 million. In cheaper areas like <a href=\"https:\/\/tomo.com\/mortgage\/rates\/harrisburg-pa?utm_source=tomo_blog\" title=\"Harrisburg\">Harrisburg<\/a>, it\u2019s lower.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What are the current VA mortgage rates?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/tomo.com\/mortgage\/rates?utm_source=tomo_blog\">See today&#8217;s rates<\/a><\/div>\n<\/div>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What is a VA residual income chart?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>A <strong>VA residual income chart<\/strong> is a tool used to evaluate a borrower\u2019s ability to cover their living expenses after paying major monthly obligations like the mortgage, utilities, and debts. Essentially, it shows how much money remains after all these obligations are deducted from your monthly income. This leftover amount is crucial because it helps the VA ensure that borrowers can manage both their mortgage and their everyday living expenses without financial strain.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>The <strong>residual income<\/strong> required can differ depending on your <strong>family size<\/strong> and the <strong>location<\/strong> of the property. Higher-income areas or larger families generally require more residual income to qualify for a VA loan. The goal is to ensure that the borrower\u2019s finances are stable enough to handle unexpected costs.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Is this like Debt-to-Income (DTI)?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>Both <strong>residual income<\/strong> and <strong>debt-to-income (DTI)<\/strong> are used to assess whether a borrower can afford a loan. However, there are key differences:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>DTI Ratio<\/strong> looks at the percentage of your gross monthly income that goes toward paying debts, like credit cards, car loans, and the mortgage.\n<ul class=\"wp-block-list\">\n<li><strong>DTI<\/strong> = (Total Monthly Debts \u00f7 Gross Monthly Income) \u00d7 100<\/li>\n\n\n\n<li>A high DTI can signal that you might struggle to make monthly payments.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Residual Income<\/strong> goes beyond just debts and looks at whether you have enough money left over to cover your <strong>living expenses<\/strong> after paying major obligations.\n<ul class=\"wp-block-list\">\n<li>It considers things like utilities, insurance, and groceries.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<p>While <strong>DTI<\/strong> is a more straightforward measure of debt burden, <strong>residual income<\/strong> gives a clearer picture of your overall financial well-being and ability to pay for day-to-day living costs in addition to your mortgage. The <strong>VA uses both<\/strong> to ensure veterans are not overextended financially.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Example:<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>DTI<\/strong> might approve a borrower with 40% of their income going toward debts, but the <strong>residual income<\/strong> calculation ensures they still have enough funds left to cover things like food, utilities, and transportation.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How can I get a VA loan statement of service?<\/h3>\n\n\n\n<p><br>A VA loan statement of service is a document that verifies your military service. It can be obtained from your unit, military personnel office, or through the <a href=\"https:\/\/www.ebenefits.va.gov\/ebenefits\/homepage\">VA\u2019s eBenefits portal<\/a>. This document is necessary to prove eligibility for a VA loan.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Do I have to get mortgage insurance with a VA loan?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>VA loans stand out by not requiring private mortgage insurance (PMI) or ongoing mortgage insurance, unlike<a href=\"https:\/\/tomo.com\/blog\/what-are-fha-loans-and-conventional-loans\/\" title=\" FHA or Conventional loans. \"> FHA or Conventional loans. <\/a>Instead, they have a one-time VA funding fee, typically 2.15% of the loan amount for first-time users (ranging from 0.5% to 3.3%). This fee helps sustain the VA loan program, much like mortgage insurance does for other loans, but with key differences: it&#8217;s a single payment (not monthly), can be rolled into the loan, and some veterans may be exempt from paying it.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Will a VA loan hurt my chances of getting the home I want?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>VA loans have stricter appraisal and inspection standards, which can unfairly\u00a0 make sellers hesitant. They also may take longer to close, which can be a disadvantage in competitive<a href=\"https:\/\/tomo.com\/blog\/what-is-the-best-time-of-year-to-sell-a-house\/\" title=\" seller\u2019s markets.\u00a0\"> seller\u2019s markets.\u00a0<\/a><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>Misconceptions about VA loans can also make some sellers less likely to accept them. However, with no down payment, VA buyers can be more flexible in negotiations, especially in less competitive markets, <a href=\"https:\/\/tomo.com\/blog\/what-is-a-buyers-market\/\" title=\"buyer\u2019s markets,\">buyer\u2019s markets,<\/a>\u00a0 or with military-friendly sellers.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What are VA loan closing costs?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>VA loan closing costs typically include appraisal fees, title insurance, and recording fees. However, the VA limits the amount of <a href=\"https:\/\/tomo.com\/blog\/how-much-are-closing-costs\/\" title=\"closing costs\">closing costs<\/a> that veterans can pay, and in some cases, sellers may cover these costs.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What are VA loan inspection requirements?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>VA loans have specific inspection requirements to ensure that the property meets safety and livability standards. This includes checking for structural issues, safety hazards, and adequate sanitation. The inspection is typically performed by a VA-approved appraiser.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What are VA foreclosures?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>VA foreclosures occur when a borrower with a VA loan defaults on their mortgage, and the VA repossesses the property. VA foreclosures are often sold at auction, and the VA may offer assistance to veterans looking to purchase these properties.<\/p>\n\n\n<div style=\"padding-top:var(--wp--preset--spacing--30);padding-bottom:var(--wp--preset--spacing--30);padding-left:var(--wp--preset--spacing--30);padding-right:var(--wp--preset--spacing--30);margin-top:var(--wp--preset--spacing--30);margin-bottom:var(--wp--preset--spacing--30);margin-left:0;margin-right:0;\" class=\"has-link-color wp-elements-c54b177fd5d2f341f8967a20726f2ac0 wp-block-post-author has-text-color has-contrast-color has-background has-tertiary-background-color has-large-font-size\"><div class=\"wp-block-post-author__content\"><p class=\"wp-block-post-author__name\"><a href=\"https:\/\/tomo.com\/blog\/author\/clairegtomonetworks-com\/\" target=\"_self\">Claire Gallaudet<\/a><\/p><p class=\"wp-block-post-author__bio\">Claire is a Mortgage Analyst at Tomo, where she explores the data and trends shaping the housing market. She is especially interested in how economic forces impact homebuyers. A Seattle native, she now lives in Austin, where she balances analysis and communications with teaching yoga and walks around the lake with her dog.<\/p><\/div><\/div>\n\n\n<p>If you&#8217;re ready to start your journey to homeownership, <a href=\"https:\/\/tomo.com\/mortgage\/app\/preapproval?utm_source=tomo_blog\" title=\"\">get pre approved with Tomo Mortgage today.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A VA loan is a mortgage loan backed by the U.S. Department of Veterans Affairs (VA). Its primary purpose is to help veterans, active-duty service members, and eligible spouses secure home financing with favorable terms. VA loans offer benefits like zero down payment, competitive interest rates, and no private mortgage insurance (PMI), making them a [&hellip;]<\/p>\n","protected":false},"author":31,"featured_media":4040,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[13,38],"tags":[],"class_list":["post-4039","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-home-buying-guide","category-mortgage-dictionary"],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/tomo.com\/blog\/wp-content\/uploads\/2024\/10\/what-is-a-veterans-loan-tomo-mortgage-jpg.webp","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts\/4039","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/users\/31"}],"replies":[{"embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/comments?post=4039"}],"version-history":[{"count":2,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts\/4039\/revisions"}],"predecessor-version":[{"id":4042,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts\/4039\/revisions\/4042"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/media\/4040"}],"wp:attachment":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/media?parent=4039"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/categories?post=4039"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/tags?post=4039"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}