Whether you want to buy a home, refinance an existing loan, or complete a short loan, the VA loan has got you covered. Qualifying for VA loans entitles you to great rates and financing with no caps. Also, you won't worry about signing up for Private Mortgage Insurance (PMI).
VA loans in Wakulla County require no down payment for veterans and surviving spouses looking to actualize their dream of owning a home. Besides, these loans offer highly competitive interest rates that guarantee incredible savings for veterans.
Conventional and FHA loans usually require borrowers also to take Private Mortgage Insurance (PMI). This monthly insurance fee secures the bank before you get 20% equity of the house.
Basics of VA Home Loans
In their simplest form, VA loans are government-backed loans that private lenders offer. The US Department of Veteran Affairs ensures that these loans have no down payment requirements and no Private Mortgage Insurance.
VA statistics indicate that millions of veterans and service members have relied on this program to purchase their homes.
VA Loan Options
The Veterans Association offers multiple loan programs for veterans and service members to exploit. The most common loan options include:
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VA Purchase Loan - This loan option lets qualified veterans, surviving spouses, and service members buy a home with no down payment.
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VA Cash-Out Refinance - With this option, you can turn your home equity into cash. This loan is ideal for anyone who wants to consolidate debt, buy property, or make significant home improvements.
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VA Energy Efficient Mortgage - If you need energy-efficient improvements, sign up for the VA energy-efficient mortgage.
- VA Interest Rate Reduction Refinance Loan (IRRRL) - Are you having trouble financing your current VA mortgage? Opt for the VA IRRRL loan option that offers a loan with lower interest rates. This loan option provides an affordable way of refinancing your VA loan without bank account verification or credit score requirements. Also, you could refinance your existing loan from an adjustable to a fixed rate.
VA Loan Eligibility
Anyone who has served on active duty for no less than 90 days is eligible for VA loans. Top qualifications for VA loan eligibility include:
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Have no less than six years of service in the National Guard or Reserves
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Be a spouse of a service member who passed away during duty or due to a service-related disability
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Completed 90 days of active duty
- Served no less than 181 active service days during peacetime
It is important to note that VA loans are available for different uniformed branches, including:
- The Army
- Navy
- Coast Guard
- Marines
- Air Force
- Space Force
- Public Health Service
- National Oceanic Atmospheric Administration
Weekend warriors can also qualify for these loans, as long as they complete six years in service. Also, you are eligible for the loan if you served under active duty during wartime.
Serving on active duty helps ensure that you fast-track the home loan benefits. Active-duty members need to have served:
- 90 continuous days
- 90 days for wartime veterans
- 181 continuous days for peacetime veterans
Will you be eligible for the VA home loan if the government shortens your service? It all depends on whether the government discharged you for various reasons, including:
- Hardship
- Reduction in force
- Specific medical conditions
- Government convenience
- Service-related disabilities
Partnering with a reliable lender will help you determine your eligibility with ease.
How Can Surviving Spouses Earn Eligibility?
Spouses play a critical role in the decisions affecting their partners and the military. Their sacrifice for the nation's food often leads to uncertainty and stress.
Previously, surviving spouses were only eligible for home loans if their partners died on duty or due to a duty-related injury. If a veteran dies, the surviving spouse applies for the loan as long as the veteran has a duty-related condition for a specific period.
Spouses should always consider checking with the VA about their benefits when their partners die.
What Home can you Buy with a VA loan?
The VA requires that your Home meets specific minimum standards before approving VA loans. A VA-certified appraiser typically uses a checklist to determine whether your preferred meets the minimum property requirements.
The Home should be safe and sanitary with a proper foundation, structure, and roof. Next, the appraiser will assess clean water, power, and heat availability. If the home has pests, broken windows, or mold, it won't get approved.
Also, the Home should have consistent access to a properly-maintained road. You'll also need to ensure that the house has sleeping, cooking, and dining areas.
Typical Lender Requirements
Most lending institutions use specific benchmarks as part of their requirements. It is common for lenders to impose a credit score requirement of 620.
Lenders also require you to provide a Certificate of Eligibility (COE) before they approve your loan. Obtaining a COE requires proof of service. Also, you'll need to fill out the appropriate paperwork to receive this certificate.
You could apply for the certificate online or opt to print out a COE request from the Veteran's Affairs website. With access to your eBenefits portal, you can receive the COE confirmation in a few minutes. However, if you choose the COE print-out, expect feedback between 4 and 6 weeks.
Essentially, a COE clears up any doubts that might question your eligibility for the loan. Once a lender has proof of eligibility, they'll move you to the following stages. Most lenders will proceed to run your credit and ask about your income and assets. They might also consider your debt-to-income ratio.
In most instances, lenders might apply exceptions to the DTI requirements. For example, your debt-to-income ratio might not be an issue if you have enough residual income. Enough residual income indicates that you have enough money left over once you complete your monthly expenses, including your new mortgage.
VA Loan Process
Obtaining a VA home loan has multiple essential steps. Top on the list of the necessary is finding a reliable lender and a no-obligation rate quote. An efficient lender will walk with you throughout the rest of the process. Always opt for a VA specialty lender who can help hasten and simplify the loan process.
How do you apply for VA loans?
If you're looking to purchase your own home, below are the basic steps of applying for and obtaining a VA home loan in Wakulla County, Florida.
Find a Lender
Once you know your loan eligibility, you can proceed with the loan application process. As mentioned earlier, you'll need to find a VA-approved lender. Your lender will assess your credit report and offer possible loan estimates.
Shop around to find a lender who'll meet your specific requirements. Compare different closing costs and other property fees.
Pre-Qualify for the Loan
Next, you'll need to know your borrowing power. For this step, you must inform your lender about your income and assets. With this information, the lender will determine whether or not you qualify for the home loan.
Essentially, pre-qualification only offers an estimate of the mortgage payment you can afford. While pre-qualification is not compulsory, this step ensures that you don't look at houses you might not afford.
Upon pre-qualification, you'll know how much income you need to proceed.
Find your preferred Home
Pre-qualification sheds light on what price range of houses you can afford. With this information, you can begin scouting for your Home. You could check out online listings for homes within your price range.
Online listings offer home options that are beyond your travel range. Also, you'll find detailed information and pictures to give you a glimpse of the houses. Alternatively, you could opt for a real estate agent.
Local real estate agents help navigate through the home-buying paperwork. Real-estate guides, classified ads, and agency ads can help you find a suitable home.
Draft the Purchase Agreement
Work with your lender to draft a document indicating the finalized terms and conditions. The purchase contract will address multiple issues, including prior leases, disclosures, inspections, and restrictions.
VA Appraisal
You need an appraisal from the Veterans Administration before completing the loan process. While anyone can request the appraisal, your lender will typically use The Appraisal System to proceed with the request.
Always remember that the VA appraisal doesn't guarantee that the house is in top condition. It is prudent to inspect the property or hire an inspection firm to help with the inspection.
Finalize the Loan
Once you agree on the established value and your credit plus income qualify you for the loan, you will receive approval. You'll need to attend the loan closing and sign all the required documents.
Be sure to seek clarification of the loan terms and requirements. Also, your lender should explain how you'll make monthly payments. You could also request closing details before you sign the documents.
VA Loan Limits
Previously, the VA capped how much veterans could receive from a VA home loan. However, from 2020, there are no loan limits from the VA. The cap removal means you can get as much as your lender is willing to give.
How Much Can You Qualify for?
Numerous factors determine the amount that you can receive. Top on that list is your debt ratio. Your lender will calculate your debt ratio by dividing your debt obligations by your gross monthly income. You qualify for the VA loan if your debt ratio is less than 41.
Your debt ratio will factor in your different credit obligations, including your car loan, student loan, or minimum credit card payments. However, monthly payments like your utility and cell phone bills might not be part of your debt ratio.
Besides the debt ratio, your lender might require you to have a good credit score and sufficient residual income. If you have a good debt ratio, but your credit score is below 620, you won't get approval from a lender. Also, you might not qualify for the loan if your residual income can't cater to your remaining monthly bills.
Regardless of the amount you qualify for, always borrow what you will comfortably pay. Take time to assess the different loan choices and settle on one that suits you.
Can You Use the Loan More than Once?
Military reassignment usually contributes to the possibility of multiple VA loans. Although it is not common, you can have more than one VA loan. Also, you can purchase a second home with the remaining entitlement amount if you have a VA loan entitlement.
VA Funding Fee
Typically, VA loans usually have an accompanying VA Funding Fee. The Department of Veterans Affairs uses this fee to back future VA loans. While first-time loan recipients pay slightly over 2%, repeat home buyers usually pay up to 3.3%.
Lenders often let you roll this fee into your total loan amount. Also, you will pay less closing costs while some lenders cover these costs. Service members with a service-related disability might not need to pay the fee.
The VA uses the remitted funding fee to offset the costs required to offer VA loans.
Besides the funding fee, you should be mindful of the closing costs. The VA regulates VA loan closing costs. Typical closing costs include:
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Recording Fees
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Credit report fees
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Title examination fees to ensure that there are no claims against the property's title
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Hazard Insurance protects you from potential liabilities
- Courier Services
Overall Benefits of VA Loans
Countless veterans, military families, and service members have used the VA home loan benefit to buy homes. This program offers incredible financial benefits that have eased homeownership for many veterans. Top benefits include:
Zero Down Payment
VA loans have unmatched popularity thanks to this benefit. You can purchase up to Wakulla County's conforming loan limit without putting anything down. If you opt for FHA or conventional loans, you will need to pay a down payment of 3.5 percent and 5 percent, respectively.
Say you opt for a $300,000 mortgage; you'll need to pay a $12,000 down payment for conventional and a $10,500 down payment for FHA. With no down payment, VA loans ensure that veterans and service members don't have to save for years in pursuit of their homes.
Cost Savings
VA loans exempt qualified service members from paying Private Mortgage Insurance (PMI). This monthly fee is a requirement for most mortgages unless you can put down 20 percent of the purchase price.
Conventional buyers will need to pay PMI until they build the required equity. For FHA loans, borrowers must pay an upfront mortgage premium and annual mortgage insurance throughout the loan's life span.
VA loans exempt you from the mandatory fee, guaranteeing significant cost savings. Also, the VA limits the closing costs and fees you'll pay. You could ask sellers to pay the loan-related closing costs.
Looser DTI Ratios
While most VA lenders have the DTI limit at 41 percent, you can still qualify for a VA home loan with a higher DTI ratio. Some lenders can focus on your ability to surpass specific income benchmarks and offer you a loan with a DTI of 55 percent.
With such flexibility, you can maximize your purchasing power.
Less Stringent Credit Requirements
Conventional and FHA lenders have strict credit benchmarks that can push military buyers to the wall. Typically, borrowers must meet a high threshold to get great interest rates. For VA loans, buyers can secure financing with a credit score of 620.
Things to do in Wakulla County, Florida
Wakulla County is a beautiful outdoor paradise encompassing the Wakulla Springs State Park, the Apalachicola National Forest, and the Ochlockonee River State Park. Here's a peek at top activities for veterans in Wakulla County.
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Kayaking & Canoeing - A kayak, paddleboard, or canoe lets you explore the area's multiple rivers, creeks, and streams. Find a local outfitter who'll offer you the equipment, gear, and guides you need to explore the area.
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Explore the Wakulla Springs - This dazzling jewel comprises four major Wakulla rivers. The rivers have unique personalities and will lead you toward the coastal beaches of Apalachee Bay.
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Scenic Areas - The natural environment also comprises three state parks that match the national forest. Be sure to spend some time at the Big Bend National Scenic Byway.
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Magical Trails - Wakulla County also has a wealth of hiking trails. Choose from nature trails to historic trails and rail trails.
- Camping Sites - Explore the county's natural beauty at the campgrounds, fish camps, or RV camps. Enjoy the freshest breath of Wakulla County's outdoor environment.
Bottom Line
Overall, the VA loan is a no-brainer over other mortgage types for veterans and service members who qualify. Millions of veterans can buy their homes at affordable rates with this benefit.
