Last week Palm State Mortgage brought you a heart-warming story of a veteran who recently received a mortgage-free home through the charitable efforts of his community.

That story led us into researching and revealing the basic details of the regular V.A. Home loan available for all veterans, our every day heroes.

We began with a discussion of the basic three requirements for qualification.

V.A. Home Loans:  Three Necessary Qualifications

In summary of the first requirement, we stated that  “Income Is Key. Basically, residual, Income, is key.  We explained how the veteran’s loan amount is limited by the debt-to-income ratio, which becomes the amount of residual income the lender believes you have after accounting for your basic monthly expenses.”  This amount determines the amount of all V.A. Home Loans.

Every case is different, but according to mortgage underwriters, debt-to-income ratio for V.A.funded loans  mandates that you should have approximately 41 percent income available to be considered well qualified for your home mortgage.

We invite you to review our previous blog article before you progress deeper into this one, which begins with qualification number two.

Number Two:  Credit History Is Crucial

The second standard for qualification involves the reliability of the soldier’s credit–your credit-worthiness, so to speak.Soldiers deserve a V.A. break on home ownership. Get the news from Palm State Mortgage

A lender will evaluate your credit typically using the previous 12 month credit history.

As you might imagine, it must be “clean,” meaning the veteran has no splotches on the credit reports from late or default payments.

The take-away here is that there is no hard and fast “minimal” credit score guide, but only individualized assessment.

Number Three:  Lively Liability Limits

Third on our Palm State List of Standards is the use of Liability Limits. We call them “lively,” because liabilities are influenced by the cost of living indexes. Typically, the limit on VA loan liability is $417,000 per property purchase.

However, the limits are also imposed with an understanding of demographics, meaning that the cost of living in your area could possibly “push the liability limit to $625,000.”

Needless to say, the lender must determine the limits of the region in which the soldier wants to buy a home. Now, is your dream home in a bustling urban metropolitan area or an under-populated, rural area?

Hope Marches On!

The United States Department of Veteran Affairs, has publicly stated that it is possible for a veteran’s income level and debt-to-income ratio “would allow him to purchase a home exceeding those limits, Military and Veterans always receive special consideration from Palm State Mortgage. Check on V.A. Loans but the VA is only liable for the listed maximum amounts.”

Number Three:  Super Critical Income Stability

Palm State Mortgage reminds you that income stability is a crucial player in a veteran’s VA-funded home loan qualification.

Valuable Paperwork For V.A. Loans:  Be prepared to submit pay stubs for the previous month or a Leave and Earning Statement is within the application process. You probably already know that you will need your W-2’s for the last two years as well as bank statements for the previous two months.

A Three Step V.A. Process

Step I – Application

It can be implied from these three qualifications, that the first step in the loan process is Application.

When the above application qualifications have been achieved, and all the paper work has been inspected, there will be an appraisal of the home the veteran has selected.

A VA appraiser “will make sure the house is worth what the veteran is about to pay for it. The VA appraiser does not work for the VA, but the VA does choose its own appraisers to ensure that the procedure is fair.”

Step II – Underwriting

Once the VA lender gets the appraisal in his hand, as well as the credit and income documents, the lender will decide if the loan should be funded. Remember, Palm State Mortgage will be helping you with each step of Homeownership is a vet's gold key to a civilian live. your loan, no matter what kind it is.

So, Step Two is underwriting the loan. Palm State reminds you that it is “the lender that underwrites the VA home loan, not the VA. The VA simply guarantees the loan.”

Step III – Closing

The last step in the process is closing a VA home loan with the transfer of the home to the buyer. This is the culmination of your hard work with documentation at each level.  V.A. Home Loans can be time-consuming and this step might involve a little waiting game. You will wait for the VA lender, because it is he  who chooses the title company. There the veteran and the lender’s attorney will celebrate the new ownership by signing all the loan documents at a certain time and date.

Look for more tips and hints for your V.A. Loan procedure at this convenient online resource.