Are you eligible for our VA Loan with Zero down?

We know that those who are serving in the military, or those who have served before, have worked extremely hard for our country. That is why there are so many benefits for military personnel or veterans throughout all businesses. However, there are many people who are thinking about applying for a home loan that do not know about the Veterans Administration (VA) loan program and the benefits it can reap. Even if you are not on active duty in the military, you may still be able to qualify. 

 

To be eligible, you must be one of the following:

  • A member of the Reserves and National Guard with at least 6 years of service
  • Discharged for a service- related disability
  • A surviving spouse of an eligible veteran who died in service, is missing in action, or is a prisoner of war, and who has not remarried.
  • A service member on active duty
  • Honorably discharged from the Armed Forces (Navy, Army, Air Force, Coat Guard, Marine Corps)
  • Public health service officer, military cadet, Naval academy midshipmen, merchant seaman with WWII service, or officer of National Oceanic & Atmospheric Administration

However, just because you are eligible, does not necessarily mean you qualify. Since this is a loan with so many benefits, you must have proof of sufficient income, satisfactory credit, and a Certificate of Eligibility. You must also be the one that will be occupying the home.

 

Income

Although the VA loan does not require you to reach a certain threshold, you must be able to afford all of your recurring monthly debts, as well as you new mortgage loan. Our experts will make sure that you are not overwhelmed with this new payment, as well as make sure that you have a consistent amount of money left so you can afford regular living expenses (groceries, gas, etc.). That left over money is known as your residual income, and it is based on your family size and location. Keeping all of that in mind, we will pull your credit and calculate your debt-to-income ratio, further confirming the sufficiency of your income. Our goal is to make sure you are able and comfortable with your new mortgage payments.

 

Certificate of Eligibility 

The Certificate of Eligibility verifies that you are eligible through your length/time of service and the character of your service. One must apply for a Certificate of Eligibility through either a VA approved lender, online with the eBenefits portal, or by mail using the VA Form 26-1800. We would be happy to help you start your application process, just contact one of our mortgage experts here.

 

To us here at VA Mortgage Corp, it is important our clients know what is going on every step of the way. One big factor when dealing with mortgage loans is the interest rate. Interest is a percentage of the amount that you owe as a fee for borrowing the money. This is shown as an interest rate, which is based on the amount of the loan. Typically, this rate is paid monthly and is included with the principal monthly payment. These are two main components in your monthly mortgage payment, along with taxes and insurance. Every loan, no matter whether it is a auto, mortgage, or medical, will have an interest rate associated with it. The higher the risk of the loan, the higher the interest rate is going to be.

 

Calculating Interest Rates

Interest rates are computed monthly, so just divide the interest rate by 12 to get the monthly rate that you will be paying. For example, if you had a 4.5% interest rate, divided by 12 will give you your monthly rate of .375% of the loan amount. Therefore, every month you will be paying .375% of the remaining loan balance. This essentially tells you what you will be paying each month, and how much of it is going to paying off the principal loan amount, and how much is paying off the interest. Since your loan balance will be getting smaller every month, the interest you pay on it will get smaller as well. The interest payment gets smaller, while the principal payment becomes larger. All lenders use something called an amortization schedule to calculate a schedule of monthly payments that include the principal and interest to extinguish the debt over a specific period. There are a couple different ways interest can be calculated within different loan programs.

 

Interest-Only Loans

These types of loans allow you to pay the interest portion of the loan for a specific period, instead of applying any money towards the principal amount. This program attracts people because of the lower payments in the beginning, however, once the interest-only period has ended, you will then have the full principal amount to pay as well as the remaining interest. So you should expect when the interest-only period has ended, that the payment will be higher for the rest of the life of the loan. Consider this loan if you want to free up your money, maybe putting it towards investing in a business during the interest-only payment period. Or if you want to go for a more expensive home, with the lower payments associated with this program, lenders may qualify you to borrow even more money. 

 

Fixed Rate Mortgages

A fixed rate mortgage means the interest rate will stay the same over the life of the loan, also known as the term. These types of loans make up for about 75% of residential mortgage loans in the United States, attracting first time homebuyers or people who don’t know too much about mortgages. The most popular fixed rate mortgages are 15, 20, and 30-year mortgages. The shorter the term, the less that you will pay in interest, but the higher the monthly payment will be. We can help you evaluate your financial goals and see what will be the best fit for you. We want to make sure you are comfortable with the loan program and the choices you make. With a fixed rate loan, you wont have to worry about any hidden features or surprise payments; it is very straightforward. It also allows you to make a budget because you can predict the payments for the years ahead.

 

Adjustable Rate Mortgages

An adjustable rate mortgage does not have the same rate over the life of the loan. The interest rate fluctuates over throughout the term at predetermined times, based on the current market. Normally, the interest rate s set for a fixed period of time. Once that period ends, it will change yearly or sometimes monthly. This can be a good thing when the rates fall, since you won’t be stuck paying the higher rate the entire time. On the other hand, if rates are on the rise, you could end up paying a lot more in interest. These are shown as a ratio, for example: a 5/1 ARM would have a constant rate for the first 5 years, but after that the rate will change every year. Typically these loans come with caps, limiting the amount the rate can change, protecting you from an extremely high interest rate. Since the rate constantly changes, lenders are willing to offer lower rates since the commitment to the rate is for a shorter amount of time. This constitutes a lower initial monthly payment. 

 

When you understand how interest works, you get to know how much your debt is really costing you. We would love to help you figure out what works best for you, feel free to give us a call at: 833 START VA or email us at: info@vamortgagecorp.com