If you are or have been in the United States military, you may have an advantage when it comes to buying a home. Active and former service members might meet VA loan qualifications to help you afford your dream home.
For many military families with home ownership dreams, the VA loan offers an appealing .
In most cases, you won’t need a downpayment. Closing costs are minimal, and you can pay off your loan early without incurring penalties.
The VA ultimately determines who’s eligible for this home loan, but knowing some general requirements can give you an idea on whether or not you’ll be approved.
Use this guide to see if you might be eligible for a VA loan and know what to expect:
General VA Loan Qualifications
VA loans are offered by traditional lenders, but they are partially backed by the Department of Veteran Affairs. Home buyers have no limits on how much they can borrow, but the VA imposes limits on how much it will guarantee.
The most important requirement is military service. You must have served 90 consecutive days during wartime, 181 days of service during peacetime, or more than six years of service for the National Guard or military reserves.
The spouse of a military service member who died in the line of duty or from a service-related disability may also be eligible for a VA loan.
In addition, VA loan applicants must have satisfactory credit, stable income, and the intent to occupy the home after taking possession.
Debt-to-Income Ratio
The VA doesn’t state a specific credit score, but your lender will. Credit score requirements can vary between lenders, but you typically need a score of 620 or higher.
Just like other types of loans, lenders will also look at your debt-to-income (DTI) ratio. The VA prefers the DTI to be 41%, but some lenders will allow for higher ratios.
Though there’s no limit on how much you can borrow, it’s good practice not to get a loan for more than you really need.
Ask yourself, How much house can I afford?
You not only need to cover mortgage payments, but also home repairs, food, utilities, and other living expenses.
VA Appraisal
Once you get your home under contract, lenders will conduct a VA appraisal to assess the property’s value and condition. The VA appraisal is required and isn’t the same as a home inspection, which isn’t required but still a good investment for buyers.
The VA appraisal must meet Minimum Property Requirements (MPR) in order to qualify for the loan. If the property is valued below the requested loan amount, buyers will either need to make up the difference, pursue another property, or request a re-evaluation.
How to Get a VA Loan
If you meet the above VA loan qualifications, you could be one step closer to owning your dream home.
The loan process usually takes 30 to 45 days to complete. You’ll need to partner with an approved VA lender to complete the application and obtain your Certificate of Eligibility.
Once you’re approved, start shopping for your new happily ever after.
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