*Original story from KSAT regarding Veterans being unaware of mortgage benefits. Lifetime value based on a $250,000 mortgage with an average rate reduction of .5% ($840 annual savings) + PMI elimination ($2,292 annual savings until threshold of equity)
The VA loan program is not new, it has been around for years. What *is* new for 2018 is a few things that may help more Veterans get into VA loans or lower their interest rate if they currently have a VA loan. Here are just a few things that are "new" about the VA loan program in 2018:
2018 Loan Limits Announced - Same as FHFA Loan Limits
The 2018 Loan Limits (Effective January 1, 2018) for VA loans are the same as the Federal Housing Finance Agency's limits. Be sure to check your county for 2018 loan limits: http://www.benefits.va.gov/homeloans/purchaseco_loan_limits.asp
VA does not set a cap on how much you can borrow to finance your home. However, there are limits on the amount of liability VA can assume, which usually affects the amount of money an institution will lend you. The loan limits are the amount a qualified Veteran with full entitlement may be able to borrow without making a downpayment. These loan limits vary by county, since the value of a house depends in part on its location.
The basic entitlement available to each eligible Veteran is $36,000. Lenders will generally loan up to 4 times a Veteran's available entitlement without a down payment, provided the Veteran is income and credit qualified and the property appraises for the asking price."
Lenders Expanding Guidelines
The VA does not lend money, it only insures the loan made by the lender against default. The VA has a set of guidelines that loans must meet, but lenders also have their own set of guidelines (often called overlays) that many may assume come from the VA.
One of the requirements for the VA loan program that many lenders have is a minimum credit score. A minimum credit score is not officially required by the VA.
While not all lenders may require a minimum credit score, many lenders will require a minimum credit score in order to qualify for getting a VA loan.
It is important to note that it is entirely possible that one lender would require a minimum 680 credit score and another would require a minimum credit score of 620 and a third a minimum of 580.
The trend seen among many lenders is the lowering of the minimum credit score they require. Some lenders don't even require a minimum credit score.
This means if you have been turned down for a VA loan in the past, it may be possible for you to get a VA loan now - even though you have the same credit score as when you were turned down.
Because different lenders have different credit score requirements, we encourage you to shop many different lenders.
Reports Say VA Loans Save You More Money
According to data being compiled by industry experts, Veterans who get a VA loan statistically pay less for their loan. According to Ellie Mae (a software company whose software is popular in the mortgage industry) VA mortgage rates routinely beat the market rates by three-eighths of a percentage point ... or more.
Other Related Important VA Loan Information:
If you are a Servicemember or Veteran with a permanent and total service-connected disability, you may be entitled to a Specially Adapted Housing (SAH) grant or a Special Housing Adaptation (SHA) grant. http://www.benefits.va.gov/HOMELOANS/adaptedhousing.asp
Most popular questions and answers about VA loans: http://www.blogs.va.gov/VAntage/17636/top-questions-va-home-loans-housing-grants/
Still Have Questions?
If you still have questions about the VA loan program, the best thing you can do is speak with a licensed mortgage professional at a VA approved lender. Reminder - each lender may have slightly different guidelines so our best advice is to speak with multiple licensed mortgage professionals who work at different lenders.
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