How to Purchase a Home with your VA Loan
The VA Loan provides our military professionals and their surviving spouses an incredible opportunity to purchase a home with no down payment and competitive terms. You will learn what you need to qualify for a VA loan, the benefits of using your VA loan vs. an FHA or Conventional loan and myths about the VA loan. Let’s dive in.
Qualifying for a VA Loan
Let’s first talk credit score. Compared to Conventional loan programs, the VA loan is much less stringent. Veterans can purchase a home with a credit score as low at 580. Traditional Conventional loans programs require a credit score of at least 640 and even then, the interest rate is much less favorable and down payment required.
VA Loan Eligibility is Something You Earn
Below are the requirements to earn the opportunity to use your VA Loan
– 2 years for regular service members
– 6 years for Reservists and National Guard
– 90 days active duty during wartime
– 181 days active duty during peacetime
If you aren’t sure if you qualify, don’t worry! Your lender will help determine if you are eligible
Surviving Spouses Can Earn Eligibility
If you are a Surviving Spouse, you’ve played an active role in supporting your family at home and your spouses unit from afar. The VA extends the VA Loan to surviving Spouses, understanding the critical role they’ve played in supporting their spouse and Military at large.
If your spouse died and you have not remarried, you may be entitled to VA benefits.
VA Loan Limits in Washington State
There is no maximum loan amount If you have your full entitlement available. If you have an outstanding VA Loan, then you will be subject to the county limits (including your outstanding VA loan) and anything above would then require a 25% down payment.
VA Loan Limits for most Counties in Washington at large is $726,200. In Pierce, King and Snohomish County the VA Loan Limit is $977,500 when purchasing a single-family residence. It is expected to increase to in 2024. This allows a Veterans or their Surviving Spouses to purchase a home for up to the County limit, without being obligated to put money down or pay Premium Mortgage Insurance (PMI).
When a Veteran purchases a home for more than the VA loan limit, they must put 25% down on the amount that exceeds the loan limit.
Lesser Known Facts about the VA Loan
1. The VA allows the seller to pay up to 7% of the buyers total closing costs. The VA Loan is the only loan that allows this. In addition to paying for the Veteran’s closing costs, (title, escrow fees, prepaid property taxes and insurance to name just a few) the funds may be used to payoff the Veterans debt. To make this point crystal clear, if you have credit card debt in the amount of $5,000 and the total closing costs the seller has agreed to pay is enough to cover that, we can (and will!) get your debt paid off by the seller at the time of closing.
2. If you are a partially or fully disabled Veteran or have the recipient of a Purple Heart, the Funding Fee will be partially or fully waived. The funding fee is paid at the time of closing and is cannot be wrapped into the total purchase price of the home. The funding fee varies between 0.5% and 3.3%. Your lender will be able to tell you exactly how much the funding fee will be.
3. You can use your VA Loan Multiple times. That’s right, It’s not a “one and done” loan. You can use your VA loan as many times as you needed. You may only use your VA on a home that will be your primary residence.
4. Like any Loan Product, the VA loan has requirements that must be met with regard to the condition of the home. Click here for all VA Loan requirements.
Commonly asked Questions about the VA Loan
QUESTION: “Can I use my VA with my partner who is not qualified to use a VA Loan?”
ANWER: Yes, you and your partner will be required to put 20% down on half of the total loan amount.
EXAMPLE:The purchase price of the home is $900,000. You would need to put down 20% on $450,000 = $90,000
QUESTION: I used my VA loan to purchase a home in New York and am now be PSC’ed to Tacoma. Can I purchase another home in Tacoma using my VA loan without selling my home in New York?
ANSWER: Yes. Use your VA loan again, however your spending limit might be slightly less based on the county limits and your total debt to income ratio.
QUESTION: I am a surviving spouse and would like to use the VA Loan. What records do I need to move forward with my home purchase?
ANSWER: The lender and Veteran’s Affairs can assist with getting the documentation you need to qualify for your home purchase.
Are you curious about other loans you could qualify for? Learn about other types of home loans and/or reach out with any questions.
Are you are a Veteran looking to purchase a home? Call/text or email Realtor,
Jenny Wetzel. 253-381-9788. Jenny@jennywetzelhomes.com