VA Loans
VETERANS (VA Loans)
Here at HomeRounds we want to make sure you have all the facts before you take your next step towards purchasing a home. If you are a Veteran, you have additional benefits, but in order to take advantage of these, you need to make sure you have all the required documents prior to loan application. This will make the whole process go faster and more smoothly for you.
The First Step
The following is a list of documents you will need to help you get started:
VA Eligibility
- DD214 – (Proof of Military Service form) If you have lost or need a new DD214 form please click here.
- VA Form 26-1880 – (Certificate of eligibility) In many cases, your lender will be able to obtain a Certificate of Eligibility for you by using ACE (Automated Certificate of Eligibility).
* If you are now on regular active duty and have not been previously discharged from active duty service, you must submit a statement of service which includes the name of the issuing authority (base or command), and is signed by or at the direction of an appropriate official.
Employment Verification
- Last two years tax returns with all schedules
- Last two years W-2's, 1099's, etc.
- Most recent pay stubs covering a one month period
- If you are Self-Employed, will need Three years Tax Returns and YTD Profit & Loss Statement.
Savings Information
- Most recent bank statements (3 months prior) for any and all accounts with all pages.
- Most recent statement from retirement, 401k, mutual funds, money market, stocks, etc.
Credit Information
- Most recent statements from your bills, indicating minimum payments and account numbers.
- Name, Address, and Phone number of your landlord, or 12 months cancelled rent checks.
- If Applicable: Copy of complete Bankruptcy and Discharge Papers.
- If Applicable: If you co-signed for a mortgage, car, credit card, etc, need 12 months cancelled checks. front and rear, indicating you are not making payments.
- Should you have no credit. Copies or your most recent utility bills will be needed.
Personal Information
- Copy of Drivers License.
- Copy of Social Security Card.
- If Applicable: Copy of Green Card or Work Permit.
- If Applicable: If you own another home(s) - see “If you own rental property” below
If you own rental property or Refinancing:
- Copy of Note & Deed from current loan.
- Copy of Property Tax Bill.
- Copy of Hazard (homeowners) Insurance Policy.
- Copy of Payment Coupon for current Mortgage.
- If Applicable: If property is multi-unit, need Rental Agreements.
Once you have applied for your mortgage and the lender has received your documents, additional documents may be requested.
WHAT DOES IT DO?
The Certificate of Eligibility will indicate the amount the US Government will guarantee for you. This entitlement amount may be multiplied by four to arrive at a figure before you are required to have a down payment.
So if you have the maximum standard entitlement of $25,000 you would multiply that figure by 4 to come up with the maximum home you can purchase before a down payment is required, or $100,000. In other words, the government would guarantee the loan by a maximum of 25% of the balance. If you are purchasing a home for more than the “4 times” figure, then you would have to provide a down payment to cover the difference.
The Certificate of Eligibility would be reduced if entitlement has been used before to get a VA loan. The amount of remaining entitlement can be determined by subtracting the amount of entitlement used from the current maximum available entitlement of $25,000.
SECOND STEP
Once you receive your Certificate of Eligibility, you can start searching for the home of your choice with or without a Realtor. However, if you are unfamiliar with the home buying process it is advisable to search for a real estate professional.
FACTS YOU NEED TO KNOW
VA guaranteed loans are made through lending institutions or Mortgage Brokers to veterans who are eligible to purchase a home. There are usually purchase limits in your area and you should be able to get the lending limit from your Lender/Broker. A guaranteed loan is not a gift and the amount has to be repaid. If you fail to make your payments you may lose your home.
Receiving a certificate of eligibility does not guarantee approval of a VA loan. The veteran must still qualify for the loan from an income and credit standpoint. Financing under this program is available with slightly more favorable terms than those available to non veterans. It is possible to finance the VA funding fee, pay no mortgage insurance premiums and you may assume the mortgage of the current owner if it is assumable and you wish to do so.
If you wish to purchase a property using a VA loan you will need to certify that you intend to occupy the property as your home. Your spouse will also have to satisfy the personal occupancy requirement. You may purchase a property with someone who is neither your spouse nor a veteran; however, the guaranty is based only on the veteran’s portion of the loan. Consult with your lender or Mortgage Broker (MTGB) to determine if this is acceptable. Unlike other loans the lender is required to submit joint loans to the VA for approval before they are made.
If a veteran dies before the loan is paid off the surviving spouse or other co-borrower must continue to make the payments. If there is no co-borrower then the loan will become a part of the veteran’s estate.
