VA Loans require no down payment and allow you to qualify for a more expensive home. Plus, today mortgage rates on VA loans are very low, making homes even more affordable. The VA doesn’t actually make loans. Instead, it insures loans so that if buyers default for some reason, the lenders will get their money. This encourages lenders to give mortgages to people who might not otherwise qualify for a loan.
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VA Home Mortgage Loan
Advantages vs Other Mortgage Loan Options
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Income Guidelines for VA Home Loans
When buying a home in Minneapolis, St Paul, Milwaukee, Madison, or all of MN and WI, the VA still requires a borrower to have sufficient and adequate income to cover the repayment of the mortgage. Before a borrower can be approved for a VA home mortgage loan, the stability of income and the continuance of the borrower's income must be established through acceptable sources of income, the borrower's past employment record, and the employer's confirmation of continued employment must be established.
Stability of a person's income is generally derived from their employment history. VA requires verification for the previous two full years and must be documented through lender verifications of previous employment or W-2's. This income must be analyzed to determine whether it can be expected to continue through the first 3 years of the mortgage loan (if the borrower intends to retire during this period, the expected retirement income, social security benefits, etc. should be used). Any gaps in employment must be reasonably explained by the borrower. Schooling or education for the borrower's profession (e.g. nursing school) can be counted towards the 2 year requirement. Allowances for seasonal employment, such as is typical in the building trades for example, may be used.
VA FUNDING FEE
In order for VA to guarantee the home loan in Minnesota or Wisconsin, there is a closing cost assessed by the VA to originate the loan called a funding fee. This fee will vary, depending upon the type of VA loan, whether this is your first time to use your entitlement, if you are a disabled veteran, the down payment and if you served active duty or in the National Guard/Reserves.
The VA funding fee is required by law. The fee, is intended to enable the veteran who obtains a VA home loan to contribute toward the cost of this benefit, and thereby reduce the cost to taxpayers. The funding fee for second time users is a bit more expensive. The idea of a higher fee for second time use is based on the fact that these veterans have already had a chance to use the benefit once, and also that prior users have had time to accumulate equity or save money towards a down payment.
The following table breaks down the funding fee charged by VA
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First time use, purchase of an eligible property |
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| Down Payment | Active Duty | Reserves/NG |
| 0% to 4.99% | 1.40% | ZZ2.4% |
| 5% to 9.99% | 1.50% | 1.75% |
| 10% + | 1.25% | 1.50% |
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Second time use, purchase of an eligible property |
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| Down Payment | Active Duty | Reserves/NG |
| 0% to 4.99% | 3.30% | 3.3% |
| 5% to 9.99% | 1.50% | 1.75% |
| 10% + | 1.25% | 1.50% |
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Cash-Out Refinance |
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| Active Duty | Reserves/NG | |
| First Use | 2.15% | 3.3% |
| 2nd Use | 2.40% | 3.3% |
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IRRL Streamline Refinance |
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| Active Duty | Reserves/NG | |
| All Homes | .50% | .5% |
| The following table breaks down the funding fee charged by VA (as of Nov 18, 2011) | ||
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First time use, purchase of an eligible property |
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| Down Payment | Active Duty | Reserves/NG |
| 0% to 4.99% | 1.40% | 1.65% |
| 5% to 9.99% | .75% | 1.00% |
| 10% + | .50% | .75% |
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Second time use, purchase of an eligible property |
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| Down Payment | Active Duty | Reserves/NG |
| 0% to 4.99% | 2.80% | 2.80% |
| 5% to 9.99% | .75% | .75% |
| 10% + | .50% | .50% |
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IRRL Streamline Refinance |
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| Active Duty | Reserves/NG | |
| All Homes | .50% | .5% |
VA STREAMLINE REFINANCE
An "Interest Rate Reduction Refinance Loan" (IRRRL) or Streamline Refinance allows Veterans to refinance their current mortgage interest rate to a lower rate than they are currently paying. This program is only available to veterans who are refinancing their original VA mortgage in which they utilized their original eligibility.Loan Conditions:
This loan can be done with
"no out of pocket money" by including all costs
in the new loan or by making the new loan at an interest
rate high enough to enable the lender to pay the costs.
VA Cash-Out Refinance
Cash-out refinances on properties owned more than one year prior to the refinance are permitted on owner occupied principal residences only, and are limited to 90% of the appraised value plus the allowable closing costs.
A cash-out refinance is when a borrower refinances their current mortgage for more than they owe in order to pull out the built up equity that has accrued in the home. The amount a home owner can borrower is limited by the value of the property compared to the loan amount (otherwise known as the loan-to-value or LTV).
The following are basic requirements of a cash-out VA refinance loan:
Equal Housing Lender |
33
Wentworth Ave E - Suite 290 |
(651) 552-3681 |
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Our services available only for properties located in Minnesota and Wisconsin. Licensed as Mortgages Unlimited, Inc. NMLS # 225504. Joe Metzler NMLS # 274132. As a Lenders One partner, we are part of the 3rd Largest Retail Mortgage Originators in the country. We are consistently ranked as one of the top mortgage lenders in Minnesota by Minneapolis St Paul Business Journal. Any use or duplication of any materials is strictly prohibited. All images, text, and materials Copyright © 1998-2012. Metzler Enterprises, LLC. All Rights Reserved. The Irish Rosemount High School Boys Soccer Rosemount High School Soccer Photos, Farmington, MN Dakota Rev |
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