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Tuesday, January 3, 2012

Quick reference guide for VA loans

In yesterday's post, I provided some basic guidelines for the standard FHA loan and the benefits to the home buyer.  In today's post, I am providing a quick reference to basic guidelines for VA loans and the associated benefits to home buyers.  Feel free to call or email (or leave a comment) if you have any quesitons regarding any of the loans in this series.  Tomorrow I will be discussing conventional loans.  Here you go:

          For your VA buyer with the right credentials, nothing beats a VA loan.
          Program guidelines:
              Loan-to-Value:  100%
                  Debt-to-Income Ratio:  as high as 55%
                  Minimum Credit Score:  640+
                   VA Funding Fee (no monthly mortgage insurance):  
                             1) 2.15% for first-time users (financed)
                             2) 3.30% for subsequent users
                   Reserves:  None required
                   Bankruptcy:  Need re-established credit
                             1) Chapter 7 – eligible 2 years from the discharge date
                             2) Chapter 13 – eligible 1 year from the filing with          Trustee’s approval
                   Foreclosure / short sale:  eligible three years from the                    foreclosure date or sale date.

     Benefits to the buyer:
                   1)  No down-payment requirement – 100% financing
                   2)  higher debt-ratio allowances – as high as 55%
                   3)  no reserve requirements
                   4)  more flexible than conventional financing with regard to credit issues
                   5)  Seller can pay up to 6% in closing costs
                   6)  Lower payment than FHA since there is no monthly mortgage insurance

D. Jed Wunderli
Certified Mortgage Planner
Alterra Home Loans

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