If you have served our country then 1st off … THANK YOU FOR YOUR SERVICE.
One of the many benefits that the U.S. Government gives our veterans is use of the VA loan. The Veterans Administration does not give VA loans. The VA insures VA loans. The VA basically tells the investor-bank-lender that the VA will insure 25% of the VA loan to county loan limit.
The VA also sets the loan limit for zero down payment on the VA loan. See loan limits here LINK.
People often get confused believing that the county loan limit is the max amount the the VA loan is good for. Rest assured the VA loan can go into the millions if the rest of the requirements are met.
After you reach the loan limit then 25% of the additional amount is to come from the Veteran for the VA Loan. I have personally funded many 1.2 Million dollar VA loans. The VA loan is not driven by “loan to value” or “debt to income” but is driven by “residual”. Residual is a calculation that is unique to the VA loan that takes all income into account, then all debts including Federal taxes, State taxes, and housing maintenance fee, and members of the family supported by the Veteran. Then the liability calculation is compared against the income of the Veteran (side note income can not be grossed up to meet residual only for DTI ratios).
The VA residual amount is set by the VA and varies based on location. If the Veteran meets the residual then the “debt to income” ratio is not necessarily a disqualifying factor. The VA loan has many unique characteristics, I.E. “VA non allowable s” these are fees that are not allowed to be paid for by the veteran and must be paid for by another party. VA also mandates a termite inspection for the protection of the veteran.
The great news is that the VA loan allows you to get the best mortgage rates available. IMPORTANT if you are “Service Connected” then you MUST request the “COE” Certificate of Eligibility and ensure that it notes “Veteran exempt from VA funding fee” This will literally save you Tens of thousands of dollars as the VA funding fee is 2.15% ($9,118.15 of loan limit in San Bernardino and Riverside county) of the loan for the 1st time use and 3.3% ($13,995.30 of loan limit in San Bernardino and Riverside county) of loan amount every use there after.
A great benefit of the VA loan is the VA IRRRL loan. This loan is only used for one purpose, lower the interest rate. NO Cash out, NO fix up the house, NO wave runners… just lower your interest rate, Best Mortgage Rates Available.
If you are a veteran, do yourself a favor and call me, Lee Duran (323) 717-1144 You can even visit me on YELP.
