VA Home Purchase - Frequently Asked Questions

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Our customers at VA Mortgage Center.com typically have many questions about the benefits they are entitled to use toward purchasing a home through the VA. OurVeteran Loan Specialists are compiling an ongoing list of helpful answers to a wide variety of questions that you may have concerning your pending home purchase and your benefits as a Veteran. If you have further questions, please call our office at 800-405-6682.

• Are conventional mortgage rates better than VA rates?
• Do I have to pay my closing costs out of pocket?
• If I have my Certificate of Eligibility, am I guaranteed to get a VA Loan?
• What are the benefits of a VA Loan compared to a conventional loan?
• I've had a past bankruptcy. Can I still get a VA Loan?
• I was turned down for a conventional loan. Can I possibly qualify for a VA loan?
• What is the maximum VA Loan amount?
• Do I need a down payment?
• What is the VA funding fee?
• Will I have mortgage insurance?
• Was your question not answered?

Are conventional mortgage rates better than VA rates?

Conventional mortgage rates aren't necessarily lower than VA rates. Once approved for a VA Loan, the Veteran or active duty service person is eligible for the best rates regardless of score or credit history. VA rates are comparable to conventional rates where the borrower has near perfect credit and 20% to put down, only with a VA Loan the borrower can have less than perfect credit and no money down. Get started with your VA Loan today by contacting a VA Loan Specialist.

Do I have to pay my closing costs out of pocket?

In most cases the answer is no. If you are purchasing a home with a conventional loan, the contract can be structured so the seller will pay up to 3% of the loan amount towards the borrower's closing costs. With a VA Loan, you can have the seller pay as much as 6% of the borrower's closing costs. If you are refinancing your home loan, however, you will be responsible for all of your costs unless you have enough equity in your home to roll the costs into your new loan.

If I have my Certificate of Eligibility, am I guaranteed to get a VA Loan?

You are guaranteed for a VA Mortgage once qualification is complete. The lender will make sure you are able to support the mortgage payment for the home or sales price you have selected. You must still qualify based on his/her income, assets, and previous 12 months of credit history. Credit history does not mean credit score. It means the borrower will need a clean credit record for the past year.

What are the benefits of a VA Loan compared to a conventional loan?

• You can get 100% financing with no mortgage insurance, which means your entire interest payment is tax deductible.
• You can get approved with less than perfect credit and still get a great rate.
• When you are ready to refinance a VA Loan, you can do what is called a VA Streamline Refinance that requires no income, asset, or credit verification. A VA Streamline Refinance is much cheaper that a conventional refinance because many of the traditional closing costs are waived. For more information about refinancing, check out VA Home Refinance FAQ's.

I've had a past bankruptcy. Can I still get a VA Loan?

• If you've had a Chapter 7 bankruptcy, you need to wait two years after it has been discharged to be able to qualify for a VA Loan. If you've had late payments on anything credit related after your bankruptcy has been discharged, it will be very difficult for you to qualify.
• If you've filed a Chapter 13 bankruptcy, you must wait one year after it has been discharged. Remember, Chapter 13 bankruptcies can take several years to become discharged. If you are going through Chapter 13, remember that you have to wait one year after discharge to become eligible, not one year after you file for the Chapter 13. Also, just like the Chapter 7, any late payments during or after the bankruptcy will make it almost impossible to qualify for a VA Loan.

I was turned down for a conventional loan. Can I possibly qualify for a VA Loan?

Yes, it is still possible to qualify for a VA Loan. Unlike many conventional lenders, the VA doesn't base approvals solely on credit like many conventional lenders. All the VA wants to see is a clean credit record for the past 12 months, as well as documentation that proves you can make a house payment based on your income in relation to the loan amount you are requesting.

What is the maximum VA Loan amount?

The maximum amount you can borrow for a VA Loan will depend on the loan limit for your county. For most counties, that VA Loan limit is $417,000. However there are some counties with higher property values where the VA Loan limit is $1,094,625. Just remember, even if you are eligible for a VA Loan, you still have to qualify for the requested loan amount. This means that you may not be approved for the entire maximum loan amount even if you are eligible for a VA Loan. If you want to purchase a home that is selling for more than the maximum VA Loan amount, you would need to come up with the additional money in the form of a down payment.

Do I need a down payment?

One of the great benefits of using a VA Loan is that you can take out the loan with no money down, up to the VA's maximum loan amount for your county, which is anywhere from $417,000 in most counties up to $1,094,625. If you are seeking to purchase a house above this limit, a down payment will be required to close the gap. In many cases, you will not have to pay any out-of-pocket closing costs. If the loan and sales contract are set up correctly, you can basically receive a home loan for 100% of the sales price and have the seller cover all of your closing costs.

What is the VA funding fee?

The VA funding fee is what the VA charges to guarantee the loan. It is not a fee that has to be paid at closing. This fee is simply added to your base loan amount and is paid over the life of the loan. This fee basically takes the place of the mortgage insurance that you would normally find on a conventional loan. Even though the VA charges this fee, you will find that it is much, much cheaper over time than mortgage insurance.

Will I have mortgage insurance?

One of the great benefits of a VA Loan is that it enables the borrower to take out up to 100% of the home's appraised value ($417,000 to $1,094,625) without having to pay mortgage insurance. Instead, the VA charges a funding fee that is much less expensive than mortgage insurance and is packaged into your total loan amount.

VA Loan Specialists

If you have questions, or if you want to determine if a Veteran Home Loan is actually the best financial decision for you, you may get advice from a VA Mortgage Specialist online or call 800-405-6682.

Get Started With Your VA Loan Request

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