Arizona VA Loan Information and Eligibility
ABLEnding Inc is one of the Arizona VA Loan Specialist, a VA loan is a type of loan special for veterans, military personnel, and their spouses. The VA guarantees a portion of the mortgage to be paid in the event of the borrower defaults on the loan. Most VA loans allow for a 0% down payment and no monthly PMI at very competitive interest rates.
This loan is designed for the specific individuals above and they must meet some requirements. One of the benefits of a VA loan is the VA does no have a minimum credit score requirement however most lenders will have their own credit minimums. VA loans are one of the best loan options for qualified people who do not have a down payment when buying a house. For veterans and active military personnel, VA loans are much easier to get than conventional loans. If you are interested in a VA loan in Arizona, the following are some of the important factors you should know.
VA Loan Arizona Eligibility
According to VA guidelines, eligible individuals include veterans, military personnel, National Guard members, and reservists. A spouse to a military member who died on active duty or has disabilities related to the service can also qualify for a VA loan.
An active-duty member qualifies for a VA loan after six months of service. National Guard and Reservists qualify for the application after six years of service. If these members are called to active duty before this period is over, they only have to be on active duty for 181 days to be eligible. If it is during a war period, National Guard and Reservists become eligible after 90 days in the service.
Advantages of VA Loans Arizona
One of the main advantages of VA loans is that they do not require a down payment. Another major benefit is the fact that the loan does not need mortgage insurance like most of the other conventional loans. The fact that there is no mortgage insurance means that the VA loan borrower will be able to afford more or have a lower payment for the same home. For instance, a borrower making a 3.5% down payment for an FHA-insured mortgage of $200,000 will have to part with $141 of mortgage insurance every month. A VA loan borrower will be saving this amount every month or can qualify for a higher priced home.
Applicable Fees/Closing Costs
When compared to other types of mortgages, the costs of VA loans are lower. However, the loans still have a Funding Fee determined by your military status. It is also determined by if you have used your VA eligibility for a prior home. If you are in the armed forces and are applying for the loan for the first time with no down payment, you will have to pay 2.15% of the loan amount as the funding fee. If you make a 5% down payment that drops to 1.5%. A 10% down payment further reduces it to 1.25% of the loan amount. National Guard members and reservists pay about .25% more than active-duty personnel.
If you are applying for the VA loan for the second time, the Funding Fee will increase to 3.3%. Disabled Veterans are exempt from the Funding Fee. The Funding Fee is waived.
While Veterans Affairs will not have a minimum credit score for borrowers, lenders have internal requirements. Most of the lenders that offer VA loans require a credit score of 620. However, some lenders will go as low as 580. Keep in mind that with lower credit score requirement, the interest rate will be higher.
Sufficient income is also a requirement for VA loan application. This is to make sure that you can make the required payments. The conditions for the applications are more flexible compared to those of a conventional loan. These loan guidelines allow VA loan borrowers to use home loan benefits one or two years after foreclosure or bankruptcy. Borrowers should also know that those VA loans are only available for homes they will occupy. The loan cannot be used to buy an investment or a vacation home.
Arizona VA Loan Limits
VA does not have a maximum loan amount. However, there are limits on the amount of liability VA can incur. Consequently, this may affect the amount of money a lender will allow you to borrow. The loan limits are the amount a qualified Veteran with full entitlement may be able to borrow without making a down payment. The loan limits are different from county to county.
In most parts of Arizona, the max loan is $424,100.
What Else Can VA Loans Do?
VA loan eligibility is not only for the purpose of purchasing a new home. You can also refinance cash out for improvements. These include storm windows, doors, insulation and energy efficiency features as well as any other home improvements. The loan is also used to refinance an existing loan for those eligible. As a result this will lower interest rate through an IRRRL loan without the need to verify your income.
What If You Don’t Pay The Loan?
If you borrow the loan and start struggling financially, the VA can step in and renegotiate the loan payment plans on your behalf. Only borrowers who are genuinely facing verifiable financial problems benefit from this.
Are you a veteran, military personnel, reservist or a member of the National Guard in Arizona? You might want to take advantage of a VA loan to help you own a home. The zero to low down payment requirement and the flexible underwriting guidelines of a VA loan in Arizona will make it simpler to own a home.
Since we are experts in this financial industry, let us help you get through it.