(May 30, 2023)
To be precise, the VA home loan program offers VA loans backed by the VA to allow eligible applicants to realize the American dream of homeownership. Since the program was created, it has focused on reducing economic challenges that service members face post-war while adjusting to civilian life.
It reflects the government's concern for veterans who miss out on housing opportunities due to the harsh credit and down payment requirements set by conventional lenders.
However, you need more than proof of your military service to qualify for a VA loan. Here's what to expect when getting the mortgage in St. Lucie County, Florida.
Are you a Hometown Hero? Find out your eligibility for the Hometown Heroes Loan Program in St. Lucie County, Florida.
What is a VA Loan?
A VA loan is a government-sponsored home loan that seeks to make the lives of eligible veterans and service members easier as they buy a home. It is disbursed by private lenders such as credit unions, banks, and mortgage companies. The private lenders also set the credit and income requirements you need to meet after verifying your military service.
Since the VA backs this home loan program, it usually refunds part of the pending balances to lenders when borrowers default. The VA also ensures that lenders don't charge high origination fees to frustrate borrowers.
You may want to consider taking a VA loan due to the flexible loan terms, low-interest rates, and a zero-down payment requirement. Lenders won't mandate you to pay any mortgage insurance premiums. Even more, it's easier to refinance the VA home loan with part of your home's equity or a low-interest-rate loan.
Types of VA loans
VA home loans are usually designed to serve several purposes. You may take one to finance a home purchase, carry out energy-efficient improvements on a residential property or refinance an existing VA loan. Whichever the use case, here are the four types of VA mortgages:
VA Purchase Loan
Turn to a VA purchase loan if your goal is to buy a new or existing home with a zero-down loan. You can use it as a reliable source of financing for a condo, multi-unit home, single-family home, or a new construction home purchase. Remember to review the lender's borrowing guidelines and requirements before taking one.
VA Energy Efficient Mortgage
The VA allows you to take a loan to finance energy-efficient improvements on a property financed with a VA purchase loan. Once you qualify, the mortgage gives you an extra $6,000 to cater for the improvements. You can only spend cash on permanent energy-efficient appliances, including heat pumps, storm/thermal windows, and solar heating/cooling systems.
VA IRRRL
The VA IRRRL and the VA cash-out refinance loan are the two types of refinance loans under the VA mortgage program. Unlike its counterpart, the IRRRL is a low-cost solution that doesn't require credit underwriting, income verification, or appraisal. The only requirement is an existing VA loan that meets lenders' requirements to qualify.
VA Cash-Out Refinance
Taking out cash from your home's equity and using it to refinance a current VA loan has been made easy with the VA cash-out refinance solution. The catch is that you can apply for this loan with or without an existing VA loan. Even better, a maximum of 90 percent of the property's value can be refinanced with this loan.
VA Loan Eligibility in St. Lucie County, Florida
VA loan eligibility requirements are generally based on one document (the Certificate of Eligibility). On the other hand, lenders' minimum credit and income requirements consider factors such as income, credit score, and debt-to-income ratio. Consider the following service requirements as you apply for a VA loan:
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Active wartime service that lasted not less than 90 days
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Active peacetime service that lasted not less than 181 days
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Service in the National Guard/Reserve for not less than six years
- A spouse of the deceased eligible service member who passed on due to a service-related disability or injury during service
Your eligibility requirements as a veteran will be a bit different than if you were an active-duty service member or surviving spouse. These conditions depend on your discharge status. So, if your discharge status is as follows, lenders may consider you for a VA loan:
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Discharge due to convenience of the government, hardship, or reduction in force
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Discharge for a service-connected medical condition or disability
- Discharge for an early out provided you served for at least 21 months two years after your enlistment
How to Verify Your VA Loan Eligibility Status
All you need to prove that you qualify for VA loan benefits is a Certificate of Eligibility. You can get a COE from the VA's website or your lender. Your lender will need the COE to evaluate your military service before taking you through their credit and income requirements.
How to Verify VA Loan Eligibility as a Surviving Spouse
The mortgage lender will require you to submit a COE to prove your connection to the deceased service member. They will also evaluate your eligibility for VA loan benefits based on your Dependency and Indemnity Compensation status.
If you are currently enrolled in the Dependency and Indemnity Compensation program, the lender will ask you to fill out VA Form 26-1817 to prove your eligibility. A copy of the Veteran's Separation will also be required.
On the other hand, if the Dependency and Indemnity Compensation benefits are out of your reach, you'll have to fill out VA Form 21P-534EZ to prove your eligibility. The form will only be reviewed once you submit it to the VA Pension Management Center in your area.
The Step-by-Step VA Loan Process
Once you meet the eligibility and lender's requirements, you're now set to complete the VA loan process. Here's what to expect when applying for the loan:
Choose a Lender
Only consider a VA-approved lender in your pursuit of a VA loan. The lender should also have several years of experience originating VA mortgages with competitive interest rates. They should also be willing to guide you through the process from the pre-qualification phase to closing.
Get a COE (Certificate of Eligibility)
Since VA loans only target service members, veterans, and surviving spouses, applicants must meet specific eligibility requirements. You need to complete a COE to prove you are eligible for the loan. The COE will detail your military service, helping lenders determine your entitlement to VA loans.
Get Pre-qualified
Like other home loans, you must pre-qualify a VA home loan before shopping for a home. This step aims to get you a pre-qualification letter that you can present to a seller to make an offer on a home.
Your lender will need details about your income, employment, marital status, and credit history to consider you for the loan. The pre-qualification will single out aspects of your application that need improvement. These aspects may include credit score and debt-to-income ratio.
Shop for a Home and Sign a Purchase Agreement
With a pre-qualification letter, you're now free to begin searching for a home. You can use the letter to make an offer, which may result in signing a purchase agreement if the seller accepts your offer. Sellers and real estate agents will definitely expect you to give a copy of the pre-qualification letter to confirm that you qualify for a home loan.
Loan Processing and Appraisal
Your lender will ask you for the signed purchase agreement to process your loan. They will also order an appraisal that conforms to VA's appraisal guidelines to weigh the property's sale price against the current market value.
Close on the VA Loan and Move In
The final VA home loan process step is closing and moving in. Your lender will only release the funds once the VA has agreed to sign in on the loan. With the finances, you can have the property's ownership transferred from the seller to you.
VA Loan Limits
The VA loan limit across the country is $647,200 as of 2022. However, this limit can reach $970,800 if you're shopping for a single-family home in a high-cost county,
Note that VA loan limits don't indicate the maximum amount you can take out from a lender as a loan without making a down payment. Instead, your VA loan entitlement determines the maximum amount you can take. So, you may qualify for a low amount if you have a reduced VA entitlement.
Can a VA Loan Be Used More Than Once?
One attractive feature about VA loans is that you can borrow them again and again as long as you meet the conditions for the subsequent loans. Lenders will only allow you to take a subsequent if you:
- Paid the loan in full and sold the home
- Had the loan assumed by another eligible borrower
- Have a pending balance on the loan despite owning the property
The VA Funding Fee
Ever wondered how the Department of Veterans Affairs still manages to sponsor VA loans all of these years? Thanks to the VA funding fee, the loan program will continue helping future veterans and military homebuyers without burdening borrowers and taxpayers.
The VA funding fee is a one-time fee made on a VA home loan. It is usually capped at 2.3 percent of the property's asking price if you are a first-time homebuyer and 3.6 percent if you take a subsequent VA loan. Expect a cap of 0.5 percent of the home's price for the funding fee if you take an Interest Rate Reduction Refinance Loan (IRRRL).
Instead of paying the VA funding fee separately, you can have it included in your total loan costs. The VA may exempt you from paying this fee if you are an eligible surviving spouse or a beneficiary of a service-connected disability.
The Overall Benefits of a VA Loan
Learning the benefits of a VA home loan will help you decide whether taking one is worth it. Discussed below are some of the perks of taking a VA mortgage to finance the home of your dreams:
No Down Payment Required
One of the obstacles to affording a home has to be the down payment charged by most mortgage lenders. But with a VA mortgage, you can still get to finance a home even when you can't make a down payment. The loan allows you to save up for other loan expenses paid during closing.
No Mortgage Insurance
Mortgage insurance is a policy designed to protect lenders if borrowers default on payments. While they are usually a requirement in FHA and conventional loans, they are inexistent in VA loans.
Lower Closing Costs
Closing costs on a mortgage can make it difficult for you to afford the loan in the long run. That is why VA home loans boast relatively lower closing costs to make homeownership less daunting for eligible service members, veterans, and surviving spouses. The VA even prohibits lenders from charging more than 1 percent of the loan amount as an origination fee to lower closing costs.
Reasonable Interest Rates
Low-interest rates on VA mortgages mean more spending money in your pockets. It also implies that you can purchase a large home and borrow more without spending money. As you shop for a VA home loan, expect a 0.5 percent interest rate on the loan.
Convenient Refinancing Options
The VA loan program allows you to have revised terms such as interest rates and payment schedules of your existing loan. With VA's refinancing options, you get to make lower monthly payments, cut interest payments and pay off your mortgage sooner.
Relaxed Approval Requirements
Unlike other mortgages that demand strict approval requirements, VA loans demand the opposite. The lenders' credit score, income, and debt-to-income ratio requirements are pretty lenient.
5 Outdoor Activities a Veteran Can Do in St. Lucie County, Florida
Don't you ever want to get away to a place with warm weather, perfect sandy beaches, and welcoming ocean waves? That place may be St. Lucie County, Florida, which boasts world-class retail treasures, mastering golf swings, watersports, and fishing.
The county manages countless attractions that cover everything from passive recreation to athletic activities, as discussed below:
Horseback Riding at Hutchinson Island Beaches
If horseback riding is your thing, visit the Hutchinson Island beaches in Fort Pierce. You can opt for guided tours on miles of trails along the beaches. The funny thing is that Hutchinson Island beaches are among the few places in the Sunshine State where horseback riding on the beach is permitted.
Camping at the Savannas
As an outdoor recreation area with picnic, fishing, boating, and camping facilities, the Savanna's Campground and Recreation Area is one place you should visit. Sit on the wraparound porch on the site and watch Savanna's waters and biodiverse wildlife. You can enjoy sights of scrub habitats, a lake, marsh, wet prairie, and pine Flatwoods in your Savannas adventure.
Play Disc Golf at County-Maintained Parks and Preserves
Play disc golf at parks and preserves maintained by St. Lucie County during your free time. Your options for the disc golf grounds include Lakewood Regional Park and Gordy Road Recreational Area.
Learn about Nature at the Oxbow Eco-Center
If you fancy learning about nature preservation in St. Lucie County, Florida, the Oxbow Eco-Center is the place to be. As an environmental learning facility, it teaches visitors about the benefits of preserving flora and fauna. There's also a guided tour led by a naturalist who will help you discover all of the wildlife and plants in the surrounding areas.
Guided Boat Tours with River Lilly Cruises and Dolphin Watch Boat Tours
The Dolphin Watch Boat Tours is a tour across the Indian River that can help you learn about Fort Pierce's history as the boat passes through a 15-mile waterway. You can see fish, sea turtles, birds, dolphins, and manatees along the way. River Lilly Cruises, on the other hand, lets you explore local wildlife, including turtles and alligators, and several bird species.
Summing up
You are now set to apply for a VA loan in St. Lucie County, Florida. If you served in any arm of the military and need a home loan, don't hesitate to turn to a VA home loan program, whether you want to buy a home or refinance a mortgage. The program can help you realize your homeownership dreams without making a down payment.
(May 30, 2023)
