Image by Tumisu from Pixabay
The most flexible and easiest qualifying mortgage loan product in America is the VA ( US Department of Veteran Affairs ) mortgage loan . Between 1944 and 1966 , approximately 20 % of all singlefamily homes built or purchased were financed by the VA home loan program for active military or retired veterans of World War II ( 1939 1945 ) or the Korean War ( 1950 1953 ). From 1944 through 1993 , the VA mortgage loan program guaranteed almost 14 million home loans . By 2013 , the VA had guaranteed over 20 million loans . As of 2019 in the VA ’ s 75th anniversary year , VA had surpassed 24 million loan guarantees for borrowers .
Did you know that there are 100 % LTV ( loantovalue ) mortgage loans available to qualifying active or retired military personnel up to $ 1.5 million dollars for owneroccupied homes as of 2020 ? Yes , a qualifying VA mortgage applicant has the option to purchase a home priced as high as $ 1.5 million with no money down . These 100 % LTV loans have no additional monthly mortgage insurance payment requirements like required for most other mortgages with a loantovalue range above 80 % of the purchase price or appraised value .
VA Loan Guidelines
Purchase
Mortgage loan underwriting guidelines are subject to change and may have some exception allowances for mortgage borrower applicants due to factors such as credit scores , income , job history , debttoincome ratios , and property types . However , these are common VA loan terms or guidelines that were available as of June 2020 :
● No money down up to $ 1.5 million for owneroccupied borrowers ( not second homes or investment properties )
● Historically , a debttoincome ratio of up to 41 % DTI * was typical for VA borrowers . However , some VA loan programs allow up to 60 % DTI or higher
● No monthly mortgage insurance premium requirements
● FICO credit scores as low as 620
* Debttoincome ratio ( DTI ) = Borrower ’ s proposed mortgage payment plus monthly consumer debt obligations that are divided by
Image by Harry Strauss from Pixabay monthly income . A borrower with $ 2,500 in monthly debt payments and $ 5,000 in monthly gross income ( before taxes ) will have a 50 % debttoincome ratio ($ 2,500 / $ 5,000 = 50 %).
VA Loan Refinance
GUIDELINES
For existing VA mortgage borrowers under newer 2020 rules , VA borrowers can pull cash out of their property up to 100 % of their property value . For example , a homeowner with an existing $ 250,000 mortgage loan secured by a property valued at $ 500,000 could apply for a new $ 500,000 cashout loan that gets them upwards of $ 250,000 additional cashout that they could use to pay off credit cards , student loans , automobile loans , business debts , or use the funds to make new property or stock investments .
A mortgage borrower in a non VA loan can refinance from a conventional bank loan or an FHA loan with costly monthly insurance premium ( MIP ) payments into a new VA loan if one or more of the borrowers has VA eligibility .
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