The VA Loan Program is designed for veterans and members who are currently serving in the military. Those who qualify are eligible to receive home financing with no down-payment and little to no closing costs. There are a few conditions and requirements one must meet in order to qualify. Let’s check them out.
While there are no minimum income standards to receive a VA mortgage, you must have consistent income and be able to pay for your monthly expenses as well has have a certain percentage of income beyond what is needed to cover your monthly expenses and mortgage payment. This additional amount of income is referred to as “Residual Income” and includes expenses like transportation, food, clothing, and other necessities.
Thanks in part to the Department of Veteran Affairs requiring all applicants to have residual income, VA Loan borrowers are more likely to sustain a good income and save up for emergencies. This has also helped VA Loan borrowers report the lowest rate of foreclosure among all major mortgage lending programs.
Luckily, you don’t need to receive a COE in order to start the application process. A COE is a document issued by the VA that lists the rights you possess pertaining to receiving VA Benefits. To receive this document you can call or visit a VA Loan specialist or print the form (VA Form 261880) from the VA website and send it via mail to the Department of Veterans Affairs.
Once the VA determines those who are eligible for a VA home mortgage, the lender who finances the loan may require certain standards are met before issuing the financing. These requirements may include minimums on your credit, income, and debt.
When you contact a specialist or lender, they can calculate your debt and credit, and run your credit score from the three major credit agencies.