4 Great need to know VA loan tips



All Vets Need To Know This

Did you know that a VA loan can virtually go unlimited? It’s not going actually to go unlimited, but there is no guideline. I’ve often seen VA loans go up to 70% Debt to Income Ratio. That is tremendous! What is this based on? Well, it’s based on a couple of factors. When we run it through Fannie Maes website to get the DU approval, it’s looking for a couple
of things.

Number 1

Do you have a really, really excellent credit score?
If you have outstanding credit, it’s going to be more liberal and lenient on the debt to income ratio. Do you have extra money left over? This is called a residual income. Here on the west coast $1,117 a month for a family of 4 is a requirement to get a VA loan. That’s what must be left over after paying your principle, interest, taxes, insurance, all your debts, and your income taxes. We even have to add $.14 a square foot to the size of the house. On a 2,000 square foot house, we will have to add $280 a month. We combine all these things together, and you must have $1,117 if you are a family of 4, left over. However,… if you have 20% more than that it could go to an unlimited debt ratio!

Number 2

On a VA loan do you know you can buy with as low as a 500 fico score? Now here’s the truth – My company can do 550. Anything below 550 never seems to get approved anyway. So with a 550 credit score, we can help you buy your own home. Did you know that some of the major banks and other lenders out there require a 640 credit score? So, if you’re in that borderline area, that’s not whom you want to go to. However, you don’t have to wait; you can get involved, we could teach you what to do, you can buy your own house!

Number 3

A refinance with 100% of the value of your home cashout? That’s a big deal. It doesn’t exist in other loans. Let me give you an example, on a conventional Fannie Mae or Freddie Mac loan; you can only borrow 80% of the appraisal. Maybe you want to pay off bills or make some home improvement. Maybe send one of your kids to college or pay a debt. Whatever it is, 80% of the appraised value is where it maxes out. On an FHA loan it’s 85%, but then, of course, you’re paying PMI. Nobody wants to pay PMI. There are good reasons for it but on a VA loan you don’t pay PMI, and you can go all the way up to 100% of the value that the house appraises for. That’s a big deal.

Number 4

Did you know if you’re purchasing a home with a VA loan you can get a million dollar loan? People say, $1,000,000! What do you mean I can get a million dollars? Doesn’t it have a cap? Well, every single county in the United States has its cap. Here in the Inland Empire, we have a $453,100 cap. Well, then how can you get a $1,000,000 loan? With a $453,100 cap what if you’re buying a house for $553,100? The VA guarantees 25% of the of that loan, so if you’ll put up 25% of the amount over the county limit, in this case, the purchase price is $100,000 above the limit, if you put $25,000 down you can get that house.

In LA county we’re looking at a $679,000 limit so if you want a house for $779,000 or $979,000 which is $300,000 above you to put 25% of the amount down above the limit and you can get that VA loan! Most people don’t know that so they wind up with Jumbo loans, lesser loans, and loans that aren’t as good. So, take a look at taking advantage of your VA eligibility because you’ve earned it.