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Qualifying For A VA Home Loan With A Bankruptcy Or Foreclosure, Primary Residence and Durability

Qualifying For Home Loan

We can really front load the majority of the heavy lifting of a mortgage loan before you ever find a home. So the way in which we go about that is gathering tax returns, certificate of eligibility, any payment statements, any disability income, we gather all that information up front. We have our in-house underwriters, right here in our office, review and approve all of that information. As a borrower, you’re approved. We’ve seen the credit, we’ve seen assets, we’ve seen your income, and you are good to go. So, now all we have to do is the underwriting and review of the collateral.

So, that’s going to include the appraisal, it’s going to include insurance, it’s going to include a pest inspection and your title insurance. If we’ve done the majority of the heavy lifting up front, and remember all of that review is done with our in the house underwriters, then there’s really not that much more to do. We’ve turned many VA loans in as little as 14 days. Most of those loans are cleared to close within 21 days. So, the timing can really be shortened based on the amount of preparation that we do before you find a home. That one of the great things about VA loan, are they really take a more liberal approach to underwriting a loan.

With A Bankruptcy Or Foreclosure In Past

Conventional loans will require that you wait up to seven years to finance after foreclosure and VA takes a much more liberal approach. They require two years, what’s called seasoning, meaning from the date that the foreclosure went through. The date that the bankruptcy was discharged, the date of the short-sale, any of those negative credit events, as long as you have two years seasoning, you can literally close on your VA home loan the very next day.

Primary Residence

If I’m active and I’m stationed elsewhere, but I want to buy a home for my family, can I do that as a primary residence? That’s one of the best factors or best benefits of a VA loan. They will absolutely allow you to buy a primary residence for your dependents, even if you’re active duty and serving elsewhere. Conventional loans, FHA loans, they’ll struggle with that type of understanding, but again this is an instance in where VA has a more liberal, underwriting guidelines.

How Many Times Use The VA Home Loan Benefit?

The answer is as many as you want. There’s no limit on the number of times you can use the certificate of eligibility to buy a home. But you should know that if you are using it for a subsequent use, that the funding fee could be greater especially if you’re putting zero down. So in many instances with clients, what we’ll show them is here’s what your funding would be with zero down, 5%, 10%, and here’s how the VA loan stacks up against a conventional loan. Now, we use a tool called the Total Cost Analysis that analyzes the total cost of a loan, which is the interest rate plus any funding fee, plus any closing costs, plus any mortgage insurance if we were comparing it against a conventional loan. We analyze the total cost of each loan over the estimated time horizon you intend to be in the home whether that’s 5, 10, 15 years.

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