VA Home Loans in Texas
Millions of service personnel and veterans are eligible to obtain VA home loans. Although numerous veterans have used their loan benefits already, it might be possible for them to purchase homes again through VA financing by using restored or remaining loan entitlement.
Over the past five years, as most prospective home buyers are aware of, lenders have been tightening their credit requirements. However, the type of score that you will need for securing VA financing tends to be well below what is needed to qualify for a conventional mortgage. Currently, VA lenders are in general looking for a minimum 620 credit score. To qualify for a conventional loan, a score closer to 740 would be needed by a veteran. On the FICO scale, a 620 score is viewed as a “Fair” credit score, or two tiers under “Excellent.” In order to secure home financing, it isn’t necessary for veterans to have anything close to perfect credit. Despite having relaxed credit score requirements, it is still possible for VA borrowers to obtain interest rates that rival whatever can be obtained by a conventional borrower.
A VA loan can be used to purchase a new residential home, refinance an existing mortgage, to refinance for taking out cash, or lowering a current interest rate. The money can also be used for purchasing a farm residence if the farm isn’t used for producing income. Although there are some restrictions on the loan when it comes to purchasing investment properties and land, most options are still open for veterans who are searching for flexible home loans.
The actual loans are not made by the VA. Instead, it partially guarantees refinancings and mortgages made via private lenders like mortgage companies, credit unions and banks. The guarantee encourages lenders to offer more favorable terms to borrowers compared to those offered on conventional loans. A VA loan can be used for cash-out refinancing or to build or buy a primary residence (not a vacation property or second home).
For many military families, service members and veterans, the VA loan program is the best home loan program available in the marketplace. These government-backed, flexible loans offer substantial benefits and opens the door to home ownership for veterans to might struggle to qualify for financing otherwise.
It isn’t necessary for qualified veterans to make a down payment in order to buy a house. It is hard to overstate how amazing this benefit is, especially in the present real estate market. For conventional financing the minimum down payment is 5 percent, and is 3.5 percent for a FHA loan. To purchase a $150,000 home, a military borrower would have to come up with $7,500 in cash to get a conventional loan and $5,250 for a FHA-backed mortgage. For most military borrowers that is a significant amount of money. A typical VA borrower has total assets of less than $7,000.
In order for a potential home buyer to qualify for a VA loan, they should pre-qualify first with a VA approved lender. It takes under 10 minutes to go through the pre-qualification process, and it gives you a starting pointing point to find out if you qualify or not for a VA loan.
The application process can be started with any lender offering VA home loans. You will be required at some point to get a Certificate of Eligibility. The document verifies that you qualify for the program and also outlines what your benefits level is.