VA Loans: A Nonconventional Financing Solution
Are you a veteran, servicemember or surviving spouse of a veteran? You may be eligible for an amazing home financing option: VA loans. They are government-secured mortgages with great benefits, such as no down payment requirement. VA loans are insured by the U.S. Department of Veterans Affairs and funded by VA-approved private lenders. If you live in or are moving to Pueblo, CO, and are interested in a VA loan, contact Annette Copeland – American Dream Mortgage. Annette is a skilled, local mortgage professional who loves helping veterans, servicemembers and their families find great home financing to achieve the dream of owning a home.
VA Loan Basics
VA loans were first introduced in 1944 during World War II. They were created to help veterans and their families find affordable mortgages with an easy approval process. Today, VA loan serve the same purpose. They have 0% required down payment, fixed interest rates, and less stringent approval requirements than many conventional loans.
VA loans are nonconventional loans, which is a term that describes any type of loan insured by a federal agency. Other types of nonconventional loans include FHA loans (secured by the Federal Housing Administration) and USDA loans (secured by the U.S. Department of Agriculture). Each is designed to help a different segment of the population find affordable, accessible financing.
VA Loan COE and Approval Requirements
To obtain a VA loan, you must first obtain a certificate of eligibility (COE). To get a COE, you need to submit certain documents, depending on your level of service. The following is a list of basic service requirements, although you will need to individually verify your eligibility:
- You served 90 or more days of active service during wartime
- You served 181 days or more of active service during peacetime
- You served 6 years or more in the National Guard or Reserves
- You are the surviving, unremarried spouse of a veteran who died during service or from a service-related injury, or who was declared MIA or POW
- You are the surviving spouse of a veteran who died during service or from a service-related injury, or who was declared MIA or POW, and you remarried at or after age 57
- You work with certain government-affiliated organizations like the National Oceanic and Atmospheric Administration
Annette Copeland – American Dream Mortgage can help you apply for your COE. Once you’ve received it, the next step is to find a private lender and get approval. The VA doesn’t set specific requirements for approval other than that you must have satisfactory credit and sufficient income to make your mortgage payments and other homeowners’ expenses. Lenders, however, have their own approval requirements for your credit score (620 or higher is a good benchmark), debt-to-income ratio (42% or lower is recommended) and other finances.
Uses and Limits for Your VA Loan
While the VA doesn’t limit how much you can borrow with a VA loan, it will only guarantee loans up to a certain limit. In Pueblo County, the limit is $453,1000. You may still get a VA loan more than that limit, but you’ll need to pay at least 20% of the difference between the VA limit and your loan as a down payment.
You can use a VA loan to purchase a house and certain approved condominiums and manufactured homes. You can also use one to build a home or to purchase and renovate or improve a home.
Here to Serve You
To see if you’re eligible for a VA loan, contact Annette Copeland – American Dream Mortgage. Annette offers free quotes for VA loans. She’s here every step of the way as you look for the home of your dreams in Pueblo.