Pennsylvania VA Loan FAQ
Pennsylvania VA Loan FAQ
D. Shane Whitteker is the owner and chief broker at Principle Home Mortgage, servicing the Williamsport Pennsylvania region. PHM specializes in helping to get their clients the best mortgages for their unique situations. One of those mortgage options is a VA loan, so we sat down with Whitteker to discuss some frequently asked questions about this loan type guaranteed by the Veterans Administration.
Question: What is a VA guaranteed loan?
Principle Home Mortgage: When it comes to deciding who to give a home mortgage to, most lenders are afraid of losses due to late or ignored payments. VA guaranteed loans are a way to protect lenders such as banks and mortgage companies against any loss in case the payment terms are not met.
Moreover, it is a way of boosting the ability of veterans to access loans at more friendly terms and conditions. The guaranteed amount will vary based on the loan amount you get as well as your previous entitlements.
The higher your income and the appraisal value of your property, the higher the loan amount you qualify for. This is based on loan limits set on a per county basis.
For more information, you can contact Principle Home Mortgage - our team of experts will be happy to answer any questions you may have about a VA loan. You will get to learn more about the exact details of a VA loan and whether you qualify.
Q: I’m a vet who is a previous homeowner. Can I still get the Pennsylvania Veteran Administration loan?
PHM: Of course. The VA mortgage is available for new home buyers as well as individuals who have owned a home before. You can apply for the Veteran Administration loan today without worrying about your home ownership status prior to your application. This means that a Veteran Administration loan is
available for both first time and repeat home owners.
Q: Do I need a certificate of eligibility to access the Pennsylvania Veteran Administration loan?
PHM: Yes you do. As a veteran from Pennsylvania, you need to get your COE from a certified eligibility center. This can also be done online by filling the required VA Form 26-1880. When mailing it, you should send it along with some proof to show that you served in the military. However, you could ask
your mortgage broker to request the COE on your behalf. Note that only approved brokers or lenders can do this.
A Certificate of Eligibility (COE) is used to determine whether you qualify for the Veteran Administration loan or not. It is usually provided by the VA administration that will attest of your participation in the service and for how long.
Q: What do I need to be able to get a Veteran Administration insured loan?
PHM: Like any other loan type, you need to meet certain requirements before your application can be reviewed and approved. According to the VA Loan Origination Reference Guide, to qualify for a Veteran Administration loan you need to provide the following information:
1) Proof of income
Income is used to calculate the debt ratio associated with the mortgage application and assumption of
ability to repay the mortgage. There are a number of factors to consider on this topic specifically. It is
important to work with a mortgage broker that understands how the VA requires income to be
calculated so that your needs as a veteran are represented properly.
2) Show intent of occupying the home
Once you apply with your mortgage broker, the mortgage paperwork will indicate a reasonable amount of time within which you should occupy the home. You cannot use the property for any other purpose other than it becoming your primary residence. One thing to keep in mind here is that the VA allows for financing on properties with up to 4 units. One of the units must be occupied by the borrower (veteran). This is a great option for someone that is looking to start on the path of real estate
investment.
3) You must be an eligible veteran
Veteran Administration loans are specially designed for veterans and you must be able to get a certificate of eligibility to qualify.
Q: How do I know if I’m eligible for a Veteran Administration loan?
PHM: A veteran legible for a VA mortgage must have actively served in the military for at least 90 days during wartime and about 181 or more days during peacetime. Pennsylvania Home Loan Specialists are trained to make the loan application process much simpler and faster.
Q: What's the maximum amount of Veteran Administration loan can I qualify for?
PHM: This is dictated by the county loan limit that can change based on the cost of living in that county.
Most counties are set at the standard max loan amount which can change when the VA sets new amounts.
Q: What uses is a Veteran Administration loan supposed to be applied to?
PHM: When seeking a VA loan, you should intend to use it for:
1) Buying a home
2) Building a home
A Veteran Administration loan can also be used to buy as well as build a home.
3) Home improvement (for home purchase or refinance)
A VA home loan can be used to improve the home you currently live in. This is a great option for a family that is running out of room but loves their location. This is also something to seriously consider in a seller’s market where there may be a shortage of homes available for purchase. Or maybe you live in a perfect location but need to update or expand the home.
This is also a great option for a home buyer that would like to make some updates or changes to the home they are purchasing. This can make a difference in the equity position after purchase. It is not uncommon for a home to sell far under current market value that is not in the best of shape. If you plan correctly you can actually buy a home, renovate it and end up with a solid equity position from doing the improvements.
4) Refinancing purposes
If you have an existing mortgage or home loan, you can get a Veteran Administration loan approved to refinance the existing mortgage debt with the aim of reducing the interest rate, getting cash out or consolidating debt. These are some common reasons for a refinance but you are not limited to this.
Q: Who is entitled to a VA funding fee exemption?
PHM: Veterans who are disabled are entitled to an exemption on the VA funding fee. In addition, if you are a surviving spouse of a veteran, you may be legible.
Q: If I qualify for a Veteran Administration loan, will I need to make a down payment?
PHM: The VA loan option allows for a no down payment transaction. As a borrower you are allowed tomake a down payment which may decrease the amount of the funding fee if you are not exempt.
Closing costs also need to be considered. Although closing costs are not technically a down payment they are potentially an out of pocket expense at closing. The VA allows for seller assist in the amount of up to 4% of the purchase price. This must be negotiated with the seller of the property when the sales price is negotiated. Seller assist towards closing costs will reduce the amount of closing costs that the buyer need to cover at closing.
Q: When I get a Veteran Administration loan, will I pay a MMI or PMI
PHM: Private Mortgage Insurance or Monthly Mortgage Insurance are not associated with Veteran Administration loans. Nonetheless, you are required to pay a funding fee unless you are considered exempt by the VA. The certificate of eligibility for a veteran will indicate whether or not they are exempt from paying the funding fee.
To learn more about VA loans, and whether they may be right for you - contact Principle Home Mortgage today.
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