15 Mar 2022 Requirements For Borrowing VA Loan Amount
VA loan amount is offered by private mortgage lenders, with the US Department of Veterans Affairs guaranteeing a part of it. In 2020, the VA changed its policies by providing loans without any limits to applicants with full entitlement. Because the department regularly updates the terms and conditions, here’s a brief of everything you need to know while borrowing VA mortgages in 2022.
What Benefits Are Offered By The VA?
Before moving on to the requirements for a VA loan, let’s talk about why you need to apply for it.
VA loan programs are decked with numerous benefits like-
- $0 down payment options
- Lower interest rates, as compared to conventional loans.
- No PMI (Private Mortgage Insurance) requirement.
- No credit score is required.
- Lower closing and funding costs.
- Flexible guidelines.
- Guarantee by the VA.
VA Eligibility Criteria
VA loans were initiated to help current and ex-military members into the civilian lifestyle. However, to reap these benefits and borrow the VA loan amount, you must apply for the Certificate of Eligibility (COE).
To apply for the COE, you must meet either of the following requirements-
- You have served in the US military for at least 181 consecutive days during peacetime or 90 consecutive days during wartime, OR
- You have served as a National Guard or Reservist of at least six years, OR
- You are the surviving spouse of a Veteran who either went missing in action, was a prisoner of war or died while rendering his services to the department.
Apart from meeting the above parameters and getting your COE, you must stand eligible to the following parameters as well-
- You are planning to live in the home, for which you are borrowing the amount. The VA does not provide loan facilities for buying a vacation home or an investment property.
- You have a minimum credit score and enough residual income. Although the VA does not require you to have any credit score, some private lenders might expect you to have a score of at least 600-620.
Terms And Conditions For 2022
According to 2022 policies, VA loan limits for an applicant with full entitlement have been excluded entirely. This means that a Veteran can buy any VA loan amount with a $0 down payment option.
Funding fees, a small charge for availing VA services, are expected to remain the same in 2022.
These fees depend upon various factors, like borrowing the loan for the first time or type of loan. An average estimate of funding fees can reach up to 0.5% for a financing loan and 3.6% for a VA purchase.
However, some Veterans and military members might be expected to pay 0.15% more than the usual funding fees in 2022. Reservists and national guards, on the other hand, might have a slight reduction in their funding fees.
What Documents Are Required For VA Loan Amount?
The first thing to apply for is the COE. This can either be applied directly through mail or you can ask your VA-approved lender to get it for you.
The requirements for COE can depend on various factors, like your service type and grounds of discharge.