How to Get a VA Loan With a Challenging Credit History

How to Get a VA Loan With a Challenging Credit History

A VA loan is a specialized type of government loan, backed by the Department of Veterans Affairs (VA). It allows you to qualify for a low-cost mortgage when you’re looking to purchase or refinance a house even if your credit isn’t perfect. If you’re on active duty in the military, a military surviving spouse, or are a veteran, you’re potentially eligible for a VA loan.

VA loans have several advantages over conventional loans including lower interest rates, less strict borrowing requirements, and no down payment due at closing. VA home loans also don’t have any monthly mortgage insurance. In this guide, you’ll learn to navigate your VA home purchase or refinance with or without excellent credit.

VA loans are issued by private lenders, such as a HomePromise, and guaranteed by the U.S. Department of Veterans Affairs (VA). Because of the government backing, if you’re considering a VA loan, you don’t need to have a perfect credit report. You can secure VA financing or get a low rate and excellent terms. These loans are often easier to get than conventional loans because of their easier credit requirements.

Eligible VA loan borrowers don’t need to abandon their dreams of owning a home because of a low credit score. The best part about credit is that it is fluid which means that it changes constantly. An improvement in your financial habits will cause your credit score to go up but knowing what to improve on can be confusing. If you’re not an expert in credit reporting, it’s hard to decide if you should pay off a debt, add more debt or close a credit card account.

If you’re ready to get started on your VA loan but need help navigating your credit options, you need help from an expert in VA loans with credit history problems. Learn how you can get a VA loan with a challenging credit history from our VA loan experts at 800-720-0250.

Can You Get a VA Loan With Bad Credit?

When it comes to credit scores, anything less than a 680 FICO Score is considered bad by some VA lenders.  Other may consider credit scores under 640 a problem. Beyond credit scores, lenders will be checking your credit report for things like how much you have available for a down payment, your overall amount of debt, and how much income you earn.

Cash is sometimes key when you have bad credit. The reason for this is that you may benefit from paying down or paying off various debts to improve your credit. Picking a lender like HomePromise important because HomePromise does not add lots of extra rules on top of the VA lending guidelines like many other lenders.

One key benefit of HomePromise is our ability to help people with difficult credit histories by approving loans for credit scores as low as 580.  Get in touch with us and see if you qualify.

Lenders Who Specialize in Bad Credit VA Loans

If you’re a would-be home buyer looking for the best mortgage lenders for bad credit, you’re not out of options. Home loans for bad credit are often backed by government agencies like the Veterans Administration (VA).

VA Loans are issued by private lenders and the Department of Veterans Affairs guarantees the loan. No down payment is required unless the home appraises for less than you’re paying for it. You however do need to be a military service member or have a prior record of military service with an honorable discharged as a veteran. Surviving spouses of servicemen and women may also be eligible.

Lenders charge an origination fee which is an upfront fee for processing a new loan application, Most lenders charge an origination fee of 1% of the loan amount meaning $2,500.00 on a $250,000 loan. The HomePromise origination fee may save you thousands because its only $590!

Want to talk to VA loan specialists and find out more? Call 800-720-0250 today.

What It Takes to Buy a House With a Bad Credit VA Loan

VA loans are backed by the Department of Veterans Affairs and allow for the purchase of homes with $0 down. Unless you are a veteran receiving disability compensation, the VA will make lenders collect from you a one-time funding fee at closing. Your home must meet specific minimum standards to qualify for VA financing. If you want to improve your credit, here are steps you can take that may improve your chances of buying a house with bad credit:

  Decrease debt

Correct errors on your credit record

Ask creditors to remove negative information on your credit report

Don’t apply for more credit

These are general suggestions that help many people, but your specific situation might be different.  Our VA loan experts are available to help you with ways to raise your credit score that are unique to your situation.  Please call today and talk to a HomePromise VA loan expert today at 800-720-0250.

How to Apply for a VA Home Loan With Bad Credit

Before applying for a VA loan, you need a Certificate of eligibility which you can get through HomePromise. With that paperwork, you can apply for a loan online with a lender like HomePromise. After serving your country, you deserve to have an easy time buying a home.

A VA loan could be your ticket to an affordable mortgage and a place to call your own.  You can apply with HomePromise over the phone or online.

Final Thoughts

Having bad credit doesn’t mean you can’t enjoy the benefits of homeownership as a service member, military surviving spouse or veteran. Instead, it might just require additional research when looking for financing. With a government-backed loan like a VA loan, you may qualify for a mortgage even with a bad credit score.

To find out if you’re eligible and how the VA loan works, give us a call at 800-720-0250 and talk to our VA loan experts.

PURCHASE REFINANCE

What are the Rules on a VA Loan for Disabled Veterans?

What are the Rules on a VA Loan for Disabled Veterans?

How do I qualify for a VA loan as a disabled veteran? Are disabled veterans able to waive the VA funding fee? Does my disability compensation count toward my income? When trying to understand VA loans and the additional benefits they offer disabled veterans, you don’t have to work through it alone. At HomePromise, our VA loan experts are professionally trained to answer your questions, listen to you, and help you make informed financial decisions. 

Qualifying for a VA Loan as a Disabled Veteran

Your VA disability rating does not hurt your ability to qualify for a VA home loan. Applying for a VA home loan as a disabled veteran means you will have access to additional money-saving benefits, even if you have a low credit score.

Before becoming eligible for VA loans and the additional benefits they provide, veterans have to meet certain service requirements.  Veterans must meet the below criteria before applying for a VA loan: 

Active Service During Wartime Served for 90 consecutive days
Active Service During Peacetime Served for 181 days
National Guard Served more than 6 years

In addition to meeting certain service requirements before being able to apply for VA loans, disabled veterans must also meet specific financial requirements. One of these financial requirements is to have a reliable source of income that is expected to continue. As a disabled veteran, your disability compensation is considered expected to continue since it is a lifetime benefit. This means it counts as income when applying for a VA loan. Being able to put your disability compensation toward your income may help you meet income requirements when applying for VA loans. 

Determining your eligibility for VA loans can be complicated. At HomePromise, our VA home loan professionals offer expert guidance on these difficult financial topics. In order to have your questions about VA loans answered and to receive a free quote, contact us today at 800-720-0520. 

VA Form 26-1880 and Applying for a Certificate of Eligibility COE

When applying for VA loans, lenders will ask for your Certificate of Eligibility, commonly referred to as COE. This is the most common form of documentation lenders will require from you in order to proceed with your VA home loan. 

The VA Form 26-1880 is the document that you must fill out in order to apply for your Certificate of Eligibility. Call our HomePromise VA loan experts at 800-720-0250 and we will submit your completed VA Form 26-1880 to the VA and often get your Certificate of Eligibility instantly.

Are Disabled Veterans Exempt from the VA Funding Fee? 

Yes, disabled veterans who receive VA disability compensation are exempt from the VA funding fee. Surviving spouses of veterans who passed away in action or from injuries sustained during military service are also exempt from the VA funding fee.  Lastly, active-duty service members who have received a Purple Heart are also exempt from the VA funding fee. If you are currently receiving disability benefits, you have the ability to waive the VA funding fee regardless of your level of disability. 

If you close on your VA loan before you start receiving disability benefits, you may still be eligible to have your VA funding fee refunded back to you if you were in the middle of applying for disability at the time. But, you have to get your disability determination within a few months after closing on your loan to qualify to get your VA funding fee refunded.  Whether refinancing or purchasing a home, not having to pay the VA funding fee can help disabled veterans save thousands of dollars in closing costs. 

The VA funding fee can range from 1.4% to 3.6% of the total loan amount depending on your down payment and whether this is your first time using this benefit. The below chart explains how the VA funding fee is calculated:

First-Time VA Loan User After First Use of the VA Loan Down Payment Amount
2.3% 3.6% Less than 5%, including no down payment
1.65% 1.65% 5% or more
1.4% 1.4% 10% or more

VA Home Loan Benefits for Disabled Veterans

VA loans offer veterans a variety of benefits, including options for approval of applications with lower credit scores, competitive interest rates, no monthly mortgage insurance, no money down, and VA mandated limits on closing costs. VA loan benefits are available for eligible veterans for life. They are not one-time benefits.

In addition to these money-saving benefits, disabled veterans are eligible to receive additional benefits when applying for a VA home loan. These benefits include exemption from the VA funding fee, special housing grants, real estate property tax exemptions, and disability compensation benefits. 

The special housing grants that are available to disabled veterans can help cover the cost of purchasing, building, or renovating a home to meet the needs of their disability. Two grants that offer disabled veterans with a 100% service-connected disability rating from the VA are the Special Housing Adaptation (SHA) and the Specially Adapted Housing (SAH) grant. 

If you are not eligible for either of these grants that are available to disabled veterans, a VA refinance might be another option for you. If the work you need done on your home is more expensive than the grant will allow, a VA refinance might help you cover these costs. To speak with a VA loan expert and learn more about a VA refinance, call HomePromise at 800-720-0520. Our VA loan professionals are specially trained to be able to discuss the benefits available to disabled veterans when applying for VA home loans. We will listen to you, answer your questions, and quickly provide you with a free quote. 

Conclusion

At HomePromise, we help make it easier for veterans and their families to apply for VA loans, whether online or over-the-phone. We’ll never prevent you from speaking directly with our VA home loan experts. We work to make the process of applying for VA loans as easy and fast as possible, even when your situation is unique. HomePromise is an approved lender with the U.S. Department of Veterans Affairs to provide VA home loans. 

Looking to apply for a VA home loan? HomePromise is here to help you. Contact us today at 800-720-0520 to receive a free quote from one of our experts. 

PURCHASE REFINANCE

VA Debt Consolidation Loans, military debt consolidation, va loans, cash out refinance, HomePromise, va lender, va cash out refi,

VA Debt Consolidation Loans

Even with the best of intentions, bills can start to pile up. From unexpected medical bills to high interest credit cards, debt can happen to anyone. Other expenses like college tuition, delinquent taxes, and second mortgages can also cause financial stress. For veterans and military families currently experiencing financial difficulties, VA military debt consolidation loans can help.

Using the VA home loan program for debt consolidation is designed to help alleviate some of these financial burdens and give veterans and military families a better option for paying off their debt faster and easier.

When determining your eligibility for a military debt consolidation loan, lenders will consider your credit report, your income and debts, the equity in your home, and your VA loan repayment history. If you have questions about how a VA debt consolidation loan could work for you, call HomePromise at 800-720-0250. Their experts will answer your questions, review your credit score, and provide you with a free quote.

VA Military Debt Consolidation

Military debt consolidation loans work similarly to cash-out refinances. If you own a home, you are able to refinance that loan for a higher amount to cover the debt. Upon closing, that additional money is pulled out and given to you. You then have paid off debt with higher monthly payments.

Note that you don’t have to have an existing VA loan presently to qualify.

For example, if your current home loan balance is $150,000 and you need $20,000 to cover existing debt from credit cards, delinquent taxes, or college tuition payments, your loan would be refinanced to $170,000 plus any financed closing costs. You would receive the $20,000 and your new mortgage payment would reflect the new loan amount of $170,000 plus financed closing costs. You can use these kinds of loans to pay off any type of debt or personal loan.

The benefits of a VA debt consolidation loan may include reducing your interest rate, having longer repayment plans or terms, decreasing your overall non-mortgage debt and having less monthly payments. Military debt consolidation loans also provide more options for veterans and military families with low credit scores and high debt-to-income ratios.

Some veterans may choose a debt management program but finding out if you qualify for a VA cash out refinance VA debt consolidation loan may be a better option.  Always remember that if you’re struggling with your debts, you have special rights if you’re presently on active duty through the Military Lending Act and the Servicemembers Civil Relief Act.

VA Loans to Pay off a Second Mortgage

If you have a second mortgage or home equity line of credit and are looking to pay off that loan, a VA debt consolidation loan could be a helpful option for you. With a military debt consolidation loan, you can pay off your second mortgage, and many times receive a more competitive interest rate, and consolidate your monthly payments into one easy payment. 

If you’re considering a VA debt consolidation loan and want to discuss your options, call HomePromise at 800-720-0250 to receive a free quote from one of our VA home loan experts.

VA Loans to Pay off Credit Cards

There is hope for those experiencing financial difficulties due to growing credit card debt: VA debt consolidation loans can help alleviate this financial burden. Veterans and military families who own a home as a primary residence are eligible to take out up to 100% of their home’s equity with HomePromise to help pay off credit card debt. The money you receive from refinancing your existing home loan would pay off your credit cards and leave you with an updated mortgage payment to reflect the higher loan amount.

It is important to note that many VA lenders limit you to 90% of the value of your home when taking out a new loan to get cash out of your home.  This is not required by the VA home loan program and a few lenders will let you go all the way up to 100% of the value of your home. HomePromise is one of those lenders so call the HomePromise VA loan experts at 800-720-0250 to apply for a 100% cash out refinance VA home loan. 

Paying off your credit card debt and having it rolled into one easy mortgage payment shortens the amount of time it will take you to pay off your debt. It will reduce your interest rate and decreases your overall non-mortgage debt amount.

It also eliminates the never-ending credit card bills with their high credit card interest rates and the harassing calls from credit card companies.

Credit card debt is considered unsecured debt. When you take out a VA debt consolidation loan to pay off your credit card debt, that debt is now considered secured debt. The debt is now called secured debt because your home is acting as collateral for your loan. Just like any VA home loan there is a risk of foreclosure if you don’t pay your mortgage. 

Military debt consolidation loans are a great option for veterans and their families because these loans offer more competitive interest rates than high interest credit cards and closing cost caps compared to other mortgage loan types. Applying for a VA debt consolidation loan to pay off your credit cards may also improve your credit score in some cases. Contact HomePromise at 800-720-0250 to receive your free quote today.

VA Loans to Pay off Delinquent Taxes

If you’re behind on your income or property tax payments, you could be facing fines, high interest rates on your debt, and potentially garnishing or placing a levy on your wages. Taking out a VA debt consolidation loan may allow you to quickly pay off your delinquent taxes and consolidate your monthly payments into one simple payment.

Some VA lenders will deny your loan if you are behind on your taxes.  HomePromise is different, many times we may be able to approve your VA loan even with unpaid state, federal or real estate taxes.  Call HomePromise at 800-720-0250 to see if you qualify for a VA debt consolidation loan today.

VA Cash Out Refinances to Pay for College

It’s no secret that paying for college tuition is expensive. Whether you’re paying for your children to go to college or you’re going to college yourself, it’s an expensive undertaking. A VA debt consolidation loan could help alleviate some of the financial burden associated with furthering your education or that of your children.

Using a VA cash out refinance to pay for college may be a great option to lower the interest rate on your student debt with a low rate VA mortgage.  This kind of VA loan option may provide you with a significant amount of money to put toward tuition or pay off student loans while maintaining one monthly payment with a low interest rate.

Receive a Free Quote for a VA Debt Consolidation Loan

When faced with the burden of paying off a second mortgage, credit card debt, college tuition, or delinquent taxes, you need to work with a trustworthy lender who has competitive interest rates. HomePromise is a lender approved by the U.S. Department of Veteran Affairs to provide VA loans. We have some of the lowest loan origination fees in the country, and we provide veterans and military families with convenient ways to apply.  If you served or currently serve in the armed forces give us a call.

Whether online or over-the-phone, HomePromise will handle all of your VA home loan and VA debt consolidation loan questions with compassion and care. We will review your credit history along with your unique circumstances and provide you with a free quote if you qualify. If you’re having difficulty getting your Certificate of Eligibility (COE) on the Department of Defense website, we can help you get it.  Call HomePromise at 800-720-0250 to learn what options may be available to you for VA debt consolidation loans.

PURCHASE REFINANCE

VA Home Loans For Disabled Veterans, HomePromise, va loans,

VA Home Loans For Disabled Veterans: Everything You Need to Know

Buying a home is one of the biggest purchases a Veteran makes. As a result, the process can often feel overwhelming and hard to navigate. One of the biggest challenges Veteran buyers face is financing the home. 

For veterans, VA home loans are available to make home ownership possible. And extra VA loan benefits are available to veterans who have a military service-related disability. Whether you’re looking to buy a new home or refinance your current home, these benefits can be very valuable. 

In this article we’re taking a closer look at VA home loans for disabled veterans along with other lesser-known benefits that are available.

VA Loans for Disabled Veterans

Regardless of disability rating, disabled veterans who have VA loan entitlement are eligible for a VA home loan as long as they meet the qualifications for the loan. While requirements vary, veterans typically need to meet minimum service standards, have an acceptable credit score, meet the minimum income requirements, and have an acceptable debt-to-income ratio. 

The debt-to-income ratio is the minimum mortgage payments on all your debts divided by your gross monthly income before taxes are taken out. One of the benefits of the VA loan program for disabled veterans is you can “gross up” your disability income by 25% to qualify for a VA loan.  This increase in income can mean the difference between loan approval and denial.

Lenders typically want to see a credit score of 620, but having a lower credit score isn’t an immediate disqualification, especially a lender like HomePromise that will allow VA credit scores even lower. Regular, reliable income is important to show lenders that you’ll have the ability to make your monthly payments while keeping up with your other bills.

These loans offer veterans many benefits that aren’t available in a typical mortgage, including:

  • No down payments necessary
  • No monthly mortgage insurance no matter how little the down payment
  • Lower than average interest rates over the life of the loan
  • No penalties for early VA loan pay-offs
  • Less strict credit requirements for approval
  • Lower income requirements than Conventional loans
  • Lower closing costs for disabled veterans
  • High loan amounts with the lifting of the VA loan limit
  • Cash out refinance loans to 100% of the value of your home*
  • Manufactured home VA loans with no money down

* only available from a select group of VA lenders like HomePromise 

A veteran’s disability rating will not hurt the chances of being approved for a VA loan as long as those minimum requirements are met. In fact, there are even more benefits available to help disabled veterans buy their own homes, refinance their homes, or modify their current home.

Disability Compensation as Income

All veterans who apply for a VA mortgage need to document their income. Lenders need to know that the applicant has a steady source of income and a reasonable debt-to-income ratio to consistently pay their mortgage on time. The VA requires income to be ​​stable, reliable and the income has to be expected to continue.

If you’re receiving disability compensation, you’ll be able to include that as income on your application. This is in addition to any other source of income you may also have. Since your disability compensation is reliable and expected to continue, it will help you meet the qualifications for loan approval. The VA rules for income are complicated, please call our VA home loan experts at 800-720-0250 for help.

VA Funding Fee Exemption

When you take out a VA loan, you’re required to pay a VA funding fee. The Department of Veterans Affairs charges these fees to cover their losses on defaulted loans. The amount you’re required to pay depends on several factors, including your service time and for the size of your down payment. 

If you’re a first-time buyer without a down payment, the funding fee is 2.3% of the total loan amount – so if you’re applying for a $150,000 loan, the funding fee would be $3,450. So, this exemption can help save a lot of money at closing. 

However, veterans who are entitled to compensation for a service-connected disability are exempt from paying this VA funding fee. Surviving spouses are also exempt from this fee if the veteran died in service or from a disability related to their service. Veterans who received their disability rating soon after they closed on their loan may also be able to obtain a refund of the VA funding fee.

Housing Grants for Disabled Veterans

In addition to these loans and programs, disabled veterans may qualify for grants to help fund the purchase of a home or to modify their current home to make it more accessible. 

Specially Adapted Housing (SAH) grant programs are available to veterans with qualifying service-related disabilities. Special Home Adaptation (SHA) grants are also available to qualifying veterans to fund adaptations like ramps, wider doorways, and kitchen and bathroom modifications.

Property Tax Exemptions and Credits for Disabled Veterans

Depending on the state or county where you live and the amount of your disability rating, if you’re a disabled veteran you may qualify for property tax exemptions and credits. These exemptions can lead to thousands of dollars in savings. In some areas, veterans with a 100% disabled status qualify for the real estate property tax relief, but other areas offer benefits to veterans with lower disability levels as well.  If you call our VA lending experts at 800-720-0250 we can help you find out what is available to you in your area.

VA Home Loans Can Help Make Homeownership a Reality

Buying a home can be an overwhelming process, especially when it comes to the mortgage process. Thankfully, VA home loans for disabled veterans can help make your homeownership goals a reality with no down payment, lower credit score requirements, and no monthly mortgage insurance (often call Private Mortgage Insurance or PMI). You may also qualify for benefits as a disabled veteran like grants, property tax exemptions, and a funding fee exemption.

HomePromise is a lender approved by the United States Department of Veterans Affairs to make VA loans.  Call HomePromise today at 800-975-0640 to talk to one of our VA home loan experts to see if you qualify for VA home loan benefits and we can help see if you can get your Certificate of Eligibility (COE).

PURCHASE REFINANCE

. ‘.Get A VA Loan With A 580 Credit Score

What qualifies for va funding fee exemptions, homepromise, va loans,

What Qualifies for VA Funding Fee Exemptions?

We are often asked who is exempt from paying the VA funding fee at closing. At HomePromise, our VA home loan experts are standing by to answer your questions and help guide you as you make these important financial decisions. 

What is the VA Funding Fee?

The VA funding fee is an additional cost that service members, veterans, or surviving spouses must pay when obtaining a VA loan. The funding fee helps cover the losses from other defaulted VA loans made to military members and veterans who stop making their mortgage payments. It keeps the VA loan program healthy and makes sure this program is still available for veterans and their families for years to come. 

The History of the VA Home Loan Program

The Servicemen’s Readjustment Act, most commonly referred to as the GI Bill of Rights, was passed in 1944. The GI Bill of Rights included the VA home loan program. This piece of legislation was signed into law by Franklin D. Roosevelt with the goal of reshaping the American economy by creating a level playing field for veterans of World War II. Helping make home loans more accessible through the VA home loan benefits program was a major part of accomplishing this goal. 

There have been many updates to the laws and rules surrounding VA loans since the program began. Some increased the buying power and capabilities of veterans using the VA loan program, while others provided more regulation to make sure this program remains available for future generations.

HomePromise understands the long history of the VA home loan program and the important role it plays in helping veterans and their families buy homes. Whether you have questions about funding fee rates, discount points, the benefit to qualifying by receiving VA compensation or any other VA mortgage questions, we’re here to help.

What Qualifies for VA Funding Fee Exemptions?

VA Funding Fee Exemptions for Disabled Veterans and Surviving Spouses

Disabled veterans are exempt from the VA funding fee. If you are currently receiving compensation for a  service-connected disability, you can waive the VA funding fee regardless of your level of disability. Surviving spouses of veterans who passed away in action and active-duty military service members who have received a Purple Heart are also exempt from paying the VA funding fee.

Here is a detailed list of qualifications for exemption from the VA funding fee: What Qualifies for VA Funding Fee Exemptions?

VA Funding Fee Exemptions
  • You’re a disabled veteran currently receiving VA disability compensation for a disability sustained during service
  • You’re currently in the process of applying for VA disability compensation but you haven’t started receiving payments yet. In this case, the VA funding fee would be returned to you after your disability payments begin as long as get your disability approved soon after closing. 
  • You’re an active-duty service member who has received a Purple Heart
  • You’re the surviving spouse of a veteran who passed away in action or from a service-related disability

How Much is the VA Funding Fee? 

Being exempt from the VA funding fee can help disabled veterans and surviving spouses save thousands of dollars in out-of-pocket fees when purchasing a home or refinancing their current one. If you closed on your loan before you started receiving your disability benefits, you may be able to have your VA funding fee refunded back to you. However, you must receive your disability benefits approval within a short time after closing on your VA loan. 

The cost of the VA funding fee is based on your total loan amount, not the purchase price of your home. It varies based on the size of the down payment and if this is your first time using the VA loan program. Return users of the VA loan program pay a higher VA funding fee compared to buyers who are using the VA loan program for the first time.

Below is a chart detailing how mortgage lenders calculate the VA funding fee: What Qualifies for VA Funding Fee Exemptions?

First-Time VA Loan User After First Use of the VA Loan Down Payment Amount
2.3% 3.6% Less than 5%, including no down payment
1.65% 1.65% 5% or more
1.4% 1.4% 10% or more

These percentages have a big impact on out-of-pocket costs at closing if you are not exempt from the VA funding fee. Below are a few examples of how much the VA funding fee can cost people based on their total loan amount: What Qualifies for VA Funding Fee Exemptions?

  Down Payment Amount $150,000 VA Loan Amount $200,000 VA Loan Amount $250,000 VA Loan Amount
First-time use Less than 5% $3,450 $4,600 $5,750
First-time use 5% or more $2,475 $3,300 $4,125
First-time use 10% or more $2,100 $2,800 $3,500
After first use Less than 5% $5,400 $7,200 $9,000
After first use 5% or more $2,475 $3,300 $4,125
After first use 10% or more $2,100 $2,800 $3,500

As a VA borrower, if you have questions about your exemption from the VA funding fee, call HomePromise to speak with one of our VA home loan experts at 800-720-0250. They will review your credit score, income sources, and credit history before providing you with a free quote. 

How Does the VA Funding Fee Work with a Cash Out Refinance?

A cash out refinance helps you take full advantage of the equity you’ve built in your home. At loan closing you receive funds to use for various purposes.  Perhaps you are looking to refinance your home with the goal of pulling cash out to pay off existing liens, renovate your home, or cover other expenses. Below is a chart showing the VA funding fees for cash out refinances:

  First-Time Use After First Use
VA Funding Fee Percentage 2.3% 3.6%

This means that if you are refinancing to the below total loan amounts, the VA funding fees would be: 

  $100,000 Total Loan Amount $200,000 Total Loan Amount $250,000 Total Loan Amount
First-Time Use $2,300 $4,600 $5,750
After First Use $3,600 $7,200 $9,000

Being able to waive the VA funding fee offers those who are exempt a significant cost savings when doing a cash out refinance. To learn more about a cash out refinance for your home, call HomePromise at 800-720-0250.

Other VA Loan Benefits Available to Disabled Veterans

In addition to being exempt from paying the VA funding fee, disabled veterans may also eligible for special housing grants, real estate property tax exemptions, and disability compensation benefits for veteran income. These benefits are in addition to the benefits already available to veterans, military service members, and surviving spouses when applying for VA loans, including options for lower credit scores, limits on closing costs, competitive interest rates, and no private mortgage insurance.   Call our VA lending experts at 800-720-0250 for more information.

How Your Credit Score Impacts Your VA Home Loan Eligibility

The Department of Veterans Affairs has no minimum credit score requirements when applying for a VA home loan. Instead, the Department of Veterans Affairs requires mortgage lenders to review the overall credit history, sources of income, and credit score of the person when determining their eligibility for a VA loan.  The HomePromise minimum credit score for VA loans is 580.

In general, having a higher credit score typically means you will receive a lower interest rate. Having a higher credit score means you are less of a credit risk for mortgage lenders, which is why they reward you with a higher rate.

To further understand how your credit score impacts your VA home loan eligibility, call our HomePromise VA loan experts at 800-720-0250. Our professionals will review your credit score and provide you with a free quote.

Talk to a HomePromise VA Loan Expert

HomePromise is a knowledgeable and compassionate lender approved with the Department of Veterans Affairs to provide VA home loans. We provide convenient options for applying for VA home loans, including online and over-the-phone.  If you have questions about how to get a Certificate of Eligibility (COE) or how to qualify for a VA streamline refinance (IRRRL) please give us a call.

Learn more about how your exemption from the VA funding fee can save you thousands of dollars at closing by calling our HomePromise VA loan experts at 800-720-0250!

PURCHASE REFINANCE

. ‘.Get A VA Loan With A 580 Credit Score

National Guard VA Loan Requirements

National Guard VA Loan Requirements

The VA home loan program offers veterans, active service members, and surviving spouses with many useful benefits that can help save them thousands of dollars in closing costs and throughout the life of their loan. What some National Guard members might not know is that they are also eligible to receive these benefits provided through the VA loan program as long as they meet specific service requirements. 

If you’re a National Guard member looking to explore your VA home loan options, call HomePromise at 800-720-0250! Our mortgage experts will listen to your unique circumstances, answer any questions you might have about the lending process, and provide you with a free interest rate quote.   VA loans for National Guard members can be complicated so give us a call today for help.

 

Army National Guard VA Loan Eligibility

At HomePromise, our mortgage experts are often asked if National Guard members are also eligible for VA loans. The answer is yes, as long as the National Guard member meets qualifying loan requirements and also meets the service requirements that are set forth by the Department of Veterans Affairs. You earned your home loan benefits through your national guard service.

In order to apply for a VA home loan as a member of the National Guard, you must have completed at least 6 years of service, been honorably discharged for a service-related disability, or completed at least 90 consecutive days of active duty service.  The service requirements National Guard members must meet in order to be eligible for the VA home loan program are detailed in the below chart.

One of the key features of the VA home loan benefit is that you qualify as a National Guard member if you serve at least 90 days of active duty service.  There are also some complicated VA rules regarding the selected reserve and title 32 orders that may help you qualify.  If you did serve in the selected reserve or you were subject to title 32 orders, please call and we will help you see if you qualify.  

 

Army National Guard VA Loan Eligibility Requirements
  • Finished 90 consecutive days of active duty service
  • Completed 6 years of honorable service
  • Honorably discharged for a disability connected to your service

Competitive Origination Fees for National Guard VA Loans

When applying for a VA home loan as a National Guard member, it’s important to understand the different options available to you. In addition to our flexible, knowledgeable, and compassionate services, HomePromise proudly offers National Guard members a highly competitive loan origination fee. No matter the total loan amount or the type of loan, our HomePromise VA loan origination fee is $590.

Call HomePromise at 800-720-0250 to speak with our mortgage professionals about receiving a free quote and conveniently applying for a VA home loan. 

We want National Guard members to have a full understanding of the significant impact loan origination fees can have on the money due at closing. Knowing what’s a reasonable loan origination fee to pay can help save you money when purchasing your home. Some lenders charge as much as 0.5%-1% of the total loan amount (1% of a 300,000 loan amount is $3,000), and many lenders charge more than $1,000 for loan origination fees. 

While it might be tempting to work with a lender who doesn’t charge any loan origination fees, the lender will most likely make you pay for it in other ways. Lenders who do not charge origination fees will typically give you a higher interest rate in order to make up for not charging you a loan origination fee or you will pay higher fees that go by other names like an application fee, commitment fee, underwriting fee or the like.

So, even though you’re not paying a loan origination fee at closing, you may end up paying other high fees or be paying more over the life of your loan due to your higher interest rate. It might feel uncomfortable to pay more money at closing, but it may save you a significant amount of money in the long run to have a lower interest rate.

 

Active Duty National Guard VA Loan Benefits

The VA loan program provides a variety of benefits for eligible National Guard members. These benefits help veterans increase their buying power when searching for a home and enable them to save thousands of dollars over the life of their loan. The benefits of the VA loan program are available to eligible National Guard members for life. 

The cost-saving benefits of the VA home loan program include competitive interest rates, no monthly private mortgage insurance, and no required down payments. Other helpful benefits include options for people with lower credit scores and limits on the amount of closing costs. 

Not needing a down payment when purchasing your home can help you keep several years of savings in your pocket. Down payments typically range from 3.5% up to 5%, which means National Guard members can save thousands of dollars by not needing a down payment when purchasing a home. 

Another important benefit of the VA home loan program are the options it provides for National Guard members with lower credit scores. If you have a lower credit score, you’re more likely to receive a higher interest rate or you might even be denied when applying for a mortgage through conventional routes.

Through the VA home loan program, National Guard members with poor or fair credit scores may still qualify for a mortgage and receive a competitive interest rate. This provides you with significant cost savings over the life of your loan. 

To learn more about how the VA loan program saves National Guard members money, call HomePromise at 800-720-0250! We listen to the unique circumstances of each National Guard member before determining their eligibility and providing them with a free quote.  We will answer your questions about qualifying for VA home loan benefits.

 

Are National Guard Members Exempt from the VA Funding Fee? 

While there are a variety of cost-saving benefits available through the VA home loan program, National Guard members are not exempt from paying the VA funding fee unless you have a service connected disability. How much you will have to pay for the VA funding fee depends on your total loan amount, whether you’ve used the VA loan program before, and your down payment. 

National Guard members do have the option to reduce the amount they have to pay for the VA funding fee by having a down payment of at least 5%. If you’re using the VA loan program for the first time, your VA funding fee is lower than if you were a return user. The VA funding fee equals 2.3% of your total VA home loan amount. If you’ve previously obtained a VA home loan, your funding fee amount is 3.6% of the total loan amount. 

 

Let HomePromise Help You Determine Your Eligibility for the VA Home Loan Program

HomePromise provides veterans, active duty service members, and their families with knowledgeable guidance, friendly customer service, and flexible options when applying for a VA home loan. You have the option to apply over the phone or online based on which method is most convenient for you.

We will help you get your certificate of eligibility (COE) since we have direct access to the VA website that issues the certificates.  The COE will have your certificate of eligibility code showing you are an eligible National Guard member.

HomePromise is an approved lender with the U.S. Department of Veterans Affairs to provide VA home loans so you can access your home loan benefit and find out if you qualify for a VA loan. Call HomePromise at 800-720-0250 to receive a free quote and to learn more about how the VA home loan program can save you money!  If you submit your loan application today we may be able to close your VA loan in the next 30 days!

 

PURCHASE REFINANCE

Get A VA Loan With A 580 Credit Score

va loan for home improvements, home promise

VA Home Improvement Loans

The VA home loan program was designed to make purchasing a home more accessible for active duty service members, veterans, and surviving spouses. The program offers money-saving benefits to those who qualify with the goal of making homeownership within reach for those who might not otherwise be able to access it. 

In addition to helpful benefits like no required down payment, no monthly mortgage insurance and options for people with lower credit scores, the VA home loan program also allows you to renovate your existing home or purchase a fixer upper and finance the cost of the renovations. These options are possible with a VA home improvement loan. 

There are multiple VA home improvement loan options for those who qualify through VA cash out refinances. When looking to renovate your current home or purchase a fixer upper as your next home, HomePromise can help you navigate these complex financial decisions. Call HomePromise at 800-720-0250 to receive a free quote that details your accessibility to a VA home improvement loan. 

100% VA Home Improvement Loans

When getting a VA home loan to purchase a home, sometimes the home has improvements that you’ll want to do after closing.  Maybe you want to upgrade your kitchen or bathrooms.  Maybe you want new carpets or a new roof.  All of these items may be possible through a VA cash out refinance if your home has increased in value after closing.

Alternately you may have lived in your home for years and need an addition for a larger family size or want to do upgrades, alterations and repairs.  The VA cash out refinance is the ideal way to get these home improvements done.  Instead, if you choose a home equity line of credit (often called a HELOC) you may experience some risk of big increases in mortgage rates because most HELOCs have adjustable rates.  Sometimes HELOC rates can rise above 20% so a fixed rate VA cash out loan is safer.

The key in doing VA cash out refinances for home improvement is to make sure you work with one of the few lenders that allow for 100% cash out refinances.  A VA cash out refinance for most lenders is limited to 90% of the value of your home which limits the amount of work you can do to improve your home. 

At HomePromise, our maximum loan is 100% of the value of your home for a cash out refinance.  Call our VA lending experts to find out if you qualify for a 100% cash out refinance at 800-720-0250.

VA Cash Out Home Improvement Loan Requirements

In order to qualify for a VA cash out refinance to do home improvements, service members must meet the standard VA home loan requirements for service and provide their Certificate of Eligibility. If you do not currently have your Certificate of Eligibility (COE), call HomePromise at 800-720-0250 to talk to a VA expert who can get your COE for you. 

The below chart details the service requirements that must be met in order to qualify for the VA home loan program: 

Type of Service Active Service During Peacetime Active Service During Wartime National Guard
Length of Service Served for 181 days Served for 90 consecutive days Served for 6 or more years

 

When applying for a VA home improvement loan, you must also meet the credit score requirements of your lender. The VA loan program does allow for options for veterans and active duty service members with lower credit scores, but credit score requirements do vary from lender to lender. If you’re wondering what your credit score is and the mortgage you maybe be able to obtain with it, call HomePromise at 800-720-0250 to speak with our mortgage experts. 

In addition to meeting the service requirements for the VA loan program and the credit requirements of your lender, the repairs to your home must also meet specific VA standards.  Your home can’t be dilapidated or need repairs that affect the health and safety of the home. Those repairs have to be completed before closing.  But you can draw cash out of the home at closing to pay contractors or pay off debts you may have accumulated by paying for needed repairs. 

Minimum property requirements must be met to qualify for a VA cash out refinance.

Understanding Minimum Property Requirements

Minimum property requirements (MPRs) were put in place to protect the value of the home itself and the health and safety of the buyer by identifying immediate threats present in the home. MPRs ensure that the property is move-in ready and meets the basic living needs a home should provide. MPRs are designed to identify a variety of issues that could affect the safety of the home as well as its value.

The below chart lists some of the minimum property requirements as determined by the Department of Veterans Affairs: 

VA Home Improvement Loan Minimum Property Requirements

The home must:

  • Have a sewage disposal system that is sanitary and safe
  • Have a water supply that is clean and continually available
  • Have a proper roof that will continue providing shelter into the near future
  • Have electrical, heating, and cooling systems that are properly functioning
  • Be large enough in size to cover basic living needs
  • Be free of peeling lead-based paint
  • Not have any fungus, dry rot, or wood-eating insects like termites
  • Be accessible year-round from either a public or private road
  • Have crawl spaces or attics that are properly vented and maintained to be accessible when needed

The above listed minimum home requirements are the basic necessities a home should provide. Having these requirement before purchasing or refinancing a home protects veterans, active service members, and their families from the added stress of purchasing a non-functioning home. It also helps protect lenders and the VA home loan program as a whole so it remains healthy for many generations to come.

A VA cash out refinance can work as a VA rehab loan if your home needs significant work to be done but the home must meet minimum property standards by the time you close on your loan.  The VA cash out refinance can act as a home equity loan tapping the equity in your home with a new first mortgage for repairs and improvements.  Note that the home has to be your primary residence to qualify for a VA cash out refinance for home improvements.

VA Home Appraisal

A VA home appraisal confirms that all of the minimum property requirements are present in the home. The VA home appraisal must be completed by a qualified, independent VA home appraiser. The VA home appraisal is a different service than the home inspection.  The appraiser is selected by the US Department of Veterans Affairs on each VA loan.

A home inspection is a thorough investigation of the home to help make buyers aware of any potential issues with the home. It’s a more in-depth review of the home that’s very important for protecting home buyers. A VA appraisal does not replace the need for a home inspection. 

Home Improvement Loans for Disabled Veterans

Disabled veterans who need to remodel their current home in order to make it accessible for themselves are eligible for special housing grants that help cover the cost of these expensive renovations. 

There are a variety of benefits disabled veterans receive when obtaining a VA home loan. In addition to these benefits, disabled veterans may also qualify for specific grants that help cover the cost of making accessibility modifications to the home. There are two grants available for disabled veterans with a 100% service-connected disability rating from the VA: the Special Housing Adaptation (SHA) and the Specially Adapted Housing (SAH) grant. 

If you are a disabled veteran who does not qualify for either of these grants, a VA cash out refinance might be a great option for helping cover the cost of accessibility renovations to your home. To learn more about your options, call HomePromise at 800-720-0250 for a free quote. We will take the time to understand your unique circumstances, listen to your needs, and answer any questions you might have

More Details About VA Cash Out Home Improvement Loans

With a VA cash out refinance you can use the money for any purpose, like home improvements and renovations of your choosing. With a VA cash out refinance, your maximum loan amount with most VA lenders is 90% of your home’s current value. But, at HomePromise we allow you to tap 100% of the value of your home as a veteran or active duty member.

A VA cash out refinance works by tapping into the equity you’ve earned and built over time in your home. In order to be able to take advantage of a VA cash out refinance, you must owe less money on your mortgage than what your home is worth. In other words you can’t be “upside down” on your mortgage meaning that your mortgage can’t be more than the value of your home.

The money available to those who qualify for a VA cash out refinance can be used for a variety of purposes. The Department of Veteran Affairs does not regulate or set rules on what the cash out money can be used for. The money from a VA cash out refinance could be used to pay off high-interest credit card debt, finance a wedding, pay for college or put an addition on your home. 

Discovering the untapped potential of the equity you’ve earned in your home can be exciting. As you’re choosing how to spend this money, keep in mind that the money you’re pulling out from your home’s equity will be refinanced into your mortgage. This means that you will be paying for it in the higher loan amount of your mortgage after the refinance is complete. 

Here is an example of the numbers behind a potential VA cash out refinance scenario: 

Total Amount Remaining on the Mortgage Appraised Value of the Home Equity Available Through a VA Cash Out Refinance
$180,000 $235,000 $55,000

 

Note that in the scenario above you have to pay the VA funding fee and any closing costs out of the $55,000 available through a cash out refinance.  Lower closing costs help you keep as much of that $55,000 for yourself.

A great way to keep your closing costs low is through the HomePromise reduced origination fee of $590.  Many VA lenders charge 1% of the loan amount as an origination fee.  That would be $3,000 on a loan amount of $300,000.  HomePromise charges only $590 regardless of the loan amount.

Discuss Your VA Home Improvement Loan with HomePromise

HomePromise is an approved lender with the U.S. Department of Veterans Affairs for providing VA home loans. We proudly offer convenient methods for applying for VA home loans, including online and over the phone.

To learn more about the ways you can take advantage of your home’s equity, call HomePromise at 800-720-0250. As a VA approved lender we will help you understand your options and provide you with a free interest rate quote

PURCHASE REFINANCE

Get A VA Loan With A 580 Credit Score

can a reservist get a va loan, home promise, va loans,

Can a Reservist Get a VA Loan?

The VA loan program provides helpful and unique benefits for active service members, veterans, and their families. As long as they meet specific requirements, Reservists and National Guard members are able to apply for the VA loan program and receive all of the benefits offered by the program. 

There are many current and former members of the National Guard or Army Reserve who don’t know that they can also qualify for VA loans and all its benefits. If you’re a Reservist considering your VA loan options, call HomePromise to speak with one of our experts at 800-720-0250.

Read more >

The Cost of a VA Loan Origination Fee at HomePromise, what is the va loan origination fee, home promise, va loans

What is the VA Loan Origination Fee?

Before borrowing for your mortgage, it’s important to understand origination fees. Choosing a lender to fund your VA home purchase loan or cash out refinance is a major decision that will impact how much money you will have to pay at closing. 

When considering different mortgage lenders, one important factor to be aware of is what fees they will charge you. One of the fees mortgage lenders will charge you is the VA loan origination fee. A general description of loan origination fees will help you fully understand what they are and how they impact the cost of financing your VA home loan.

For any remaining questions on origination fees, call our VA loan experts at 800-720-0250. We will be able to review your application and quickly provide you with a free quote. 

Read more >

Veterans with disabilities, How To Get A VA Loan With A 580 Credit Score, homepromise

How Much is the VA Funding Fee?

Through the VA home loan, veterans, service members, and their spouses are eligible for a variety of useful benefits. What keeps the VA home loan and its benefits continuing year after year are the payments made from the VA funding fee. 

Figuring out how much you may owe for the VA funding fee when getting a VA loan is a hard task to handle without a mortgage professional. When you navigate the home buying process as a veteran, service member, or spouse of a veteran who died in the service, our HomePromise experts are here to help guide you at 800-720-0250. 

Read more >