(today’s guest blogger is James Kelly from vabenefitblog.com)
Almost seven decades after its creation, the VA Home Loan Guaranty program has helped about 19 million men and women turn home ownership from a dream into a reality. Today, service members and veterans use VA loans to finance their homes, whether it is their first starter home or the home of their dreams. A bulk of benefits within the program gives military homebuyers reason to choose VA loans.
Interest rates on VA Loans in California are lower than those of conventional loans. The Department of Veterans Affairs does not issue the loans. Instead, the VA guarantees up to 25 percent of each loan. As a result, VA-certified lenders take on less risk and feel comfortable shaving points off of interest rates. To reward active-duty homebuyers even further, their VA loans boast interest rate caps.
As though competitive interest rates aren’t enough to reduce monthly payments, California VA loans come with no private mortgage insurance (PMI). Common in traditional loans, especially in the subprime market, PMI is a hefty cost every month. But VA loan borrowers need not worry about this expense. They also never have to worry about prepayment penalties.
Still, VA loans’ most popular perk concerns down payments, or the lack thereof. Qualified military homebuyers can obtain a VA loan and pay nothing down. Even when they pay 0 percent down, they can still finance their home in full. San Luis Obispo County’s VA loan maximum is $528,750. That limit marks most VA loan borrowers can get in that county.
Qualifying for a VA loan in California is more common among military homebuyers than qualifying for a traditional loan. For the most part, this is due to the less stringent credit and financial requirements. The VA does not set a credit score requirement, but VA-certified lenders prefer scores higher than 620. Lenders tend to look for debt-to-income (DTI) ratios—which compare monthly income to debt—lower than 41 percent.
Eligibility boils down to service history and type of discharge. Veterans with dishonorable discharges are ineligible. Only honorable and medical-related discharges are allowed.
Those who may be eligible have:
– Served on active duty during wartime for 90 days or during peacetime for 181 days
– While in the National Guard or Reserves, served for at least six years
– Active duty status and meet one of the service requirements above
– Survived a spouse who died in the line of duty or due to a service-connected injury
Talk with the Keith Byrd Team or a VA-certified lender today to get a Certificate of Eligibility (COE) and be on your way to home ownership.