VA Loans

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Requirements for Loan Approval

The VA Home Loan program allows veterans with qualifying income and credit to purchase a primary residence without putting any money down towards the sale price of the home, as long as that sale price does not exceed the appraised value of the home. Veterans do need money towards closing costs as well as earnest money, which the seller generally requires when a sales contract is signed. Closing costs may be paid by the seller, which can be negotiated when the sale price of the home is set

To obtain a VA loan, the law requires that:

  • The applicant must be an eligible veteran who has available entitlement.
  • The loan must be for an eligible purpose.
  • The veteran must be a satisfactory credit risk.
  • The veteran must occupy or intend to occupy the property as a home within a reasonable period of time after closing the loan.
  • The income of the veteran and spouse, if any, must be shown to be stable and sufficient to meet the mortgage payments, cover the costs of owning a home, take care of other obligations and expenses, and have enough left over for family support.

Costs of Obtaining A VA Loan
Funding fee (as of Oct. 1, 1993)

A basic funding fee of 2.00 percent must be paid to the VA by all but certain exempt veterans. A down payment of 5 percent will reduce the fee to 1.50 percent and a 10 percent down payment will reduce it to 1.25 percent.

A funding fee of 2.75 percent must be paid by all eligible Reserve/National Guard individuals. A down payment of 5 percent or more will reduce the fee to 2.25 percent and a 10 percent down payment will reduce it to 2.00 percent.

The funding fee for loans to refinance an existing VA home loan with a new VA home loan to lower the existing interest rate is 0.5 percent.

Note: For all VA home loans, the Funding Fee may be paid in cash or it may be included in the loan.

Other Closing Costs
Reasonable closing costs may be charged by the lender. These costs may not be included in the loan. The following items may be paid by the veteran purchaser, the seller, or shared. Closing costs may vary among lenders and also throughout the nation because of differing local laws and customs. Here are some of the costs you may be expected to pay at closing:

  • VA Appraisal
  • Credit Report
  • Loan Origination Fee (usually 1 percent of the loan)
  • Discount points
  • Title Search and Title Insurance
  • Recording Fees
  • State and/or Local Transfer Taxes, if applicable
  • Survey

“I am personally dedicated to helping you and your family find the perfect loan to suit your needs.  Contact me today”

Phone (360) 698-6471
Fax (425) 283-1024

Email: Shane.Mcgraw@legacyg.com

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