VA Home Loans in Florida

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VA Home Loans in Florida

This article was written to give general instructions on VA loans in Florida. Florida became part of the union in 1845 and It is well known for its wonderful natural beauty and pleasant weather. The state was named by the Spanish explorer Juan Ponce de Leon in honor of the Spanish Easter, known as “Feast of the flowers” or “Pasqua Florida”. Tourism is the main industry of Florida. Every year, millions of visitors travel to Florida to enjoy theme parks, scenic landscapes, national parks and Florida’s beautiful beaches. 

Do you want to move to Florida? Below you will find information on the real estate market in Florida. According to Zillow, the average price of homes for sale is $ 288,000 and the average selling price is 213,400. The value of housing has increased by 8.3% in last one year and is expected to increase by 3.18% in 2018. 

For many military borrowers, VA mortgage loans are the most suitable loan programs on the market. This loan program has helped more than 22 million military employees since 1944. However, many borrowers and do not understand how VA mortgage loans can help them. Even if they can qualify for VA mortgage loan they aren’t aware of its importance. 

To help Veteran borrowers and make them more familiar with VA mortgage loans, I will talk about some important facts about a VA mortgage and its benefits. 

The VA loans in Florida like other states are insured by the United States department of Veteran Affairs (VA). Most folks do not recognize this simple point and believe that VA initiates and awards loans to borrowers. VA doesn’t originate loans itself instead it only assures them and provides a surety to lenders in case a homeowner defaults on the VA home loan. As regards the assurance and surety provided by VA, mortgage lenders offer 100% funding to veteran borrowers without any special private mortgage insurance. 

Unlike traditional mortgages and FHA loans, VA loans do not require a minimum credit score. This means that Veteran borrowers are entitled to qualify for VA home loans even if they have bad credit score. Furthermore, VA does not require borrowers to have a certain amount of debt and income balance (debt-to-income ratio. Many Veteran borrowers who do not qualify for regular loans and FHA loans due to harsh restriction of debt-to-income ratio still can get a VA loan.  

Veteran borrowers with outstanding charged off and collections accounts can also qualify for a VA home loan without having to pay for it. As you can see, the VA loan conditions are suitable. Therefore, VA loans are considered as one of the best mortgage programs in the United States. 

VA Loan Eligibility: 

Buyers who wish to apply for a VA home loan must know VA Loan eligibility requirements for qualification. Members of the National Guard and reservist, actively serving the military and retired are entitled to a VA home loan if they meet the minimum conditions of service. All Veteran borrowers wishing to obtain a VA loan must obtain an eligibility certificate (Certificate of Eligibility) to authenticate to the lender that they meet the eligibility criteria for VA home loans.

Even spouses of veterans who died on duty or suffered any kind of disability during their military service can also benefit from a VA mortgage loans. Military members are entitled to VA Loan eligibility after completing the active service for six months. Members of the National Guard and reservist must wait six years for VA Loan eligibility. However, if National Guard members and reservist members are transferred to full-time services, they will be entitled to VA mortgage loan after 181 days of service. National Guards or reservist members who serve continuously for 90 days on a foreign soil during the wartime have a right to obtain VA mortgage. 

If the borrowers cannot get a certificate of Eligibility from the VA, the lender will not support the VA loan. If Veteran borrower cannot obtain COA from VA, this means that they do not meet the minimum requirements for a VA loan service and therefore cannot qualify for a loan. Borrowers who are not entitled to a VA loan should think of another viable loan option with low requirements, such as an FHA home loan. 

VA Home Loan Benefits:   

The VA Loan Program is a gift given by United States of America’s government and United States Department of Veteran Affairs to its military personnel and veterans who enthusiastically serve in armed forces, fight and even sacrifice their lives for their country.  

Private mortgage lenders love to instigate and finance VA home loans because they are partly assured by the VA in case the mortgagors defaulting on the loan. Due to this assurance, VA home loans come with several profits for the borrowers.   

One of many VA Home Loan Benefits is in case of a traditional mortgage loan, borrower generally pay an advance of 20% to obtain a loan. However, a VA loan does not require advance payments from Veteran borrowers. You can benefit from a VA mortgage loan with zero down  payment.

The interest rates on VA mortgages are also lower than those on conventional mortgages. Since VA loans are guaranteed by VA, the lender can offer low interest rates to Veteran borrowers. Military personnel eligible for VA mortgages can benefit from the low interest rates on these loans. The VA does not specify the interest rates on the VA loans, but the lender determines the interest rate on the loan. The interest rates on the VA mortgage loans can vary according to the credit score, the loan-to-value ratio, the debt to-income ratio, the down payment and other factors. A borrower who can make an advance payment of at least 10% will receive a lower interest rate than those who cannot pay any advance. Therefore, Veteran borrowers who wish to obtain a low interest rate on VA loan must pay at least 10%.

Other VA home loan benefits are that it does not require any private mortgage insurance (PMI), unlike traditional mortgages, where borrowers who are financing more than 80% of the value of their home must pay for Private Mortgage Insurance (PMI). In addition, there are no closing costs for VA housing loans. 

Veteran borrowers often have a low credit score, which prevents them from qualifying for a conventional mortgage. Borrowers whose credit score is low can obtain a VA mortgage due to the absence of minimum credit score conditions for the loan. The requirement of debt-to-income ratio is not compulsory for VA loans. 

However, VA mortgages have certain requirements for a housing event, such as short sale or foreclosure. The lowest waiting period for a VA mortgage is after a short sale or a foreclosure in 2 years. This waiting period is lower than other loans. After the housing contract, the borrower must wait three years before being eligible for an FHA loan and a loan from the United States Department of Agriculture (USDA). You will be authorized for a traditional loan after 4-7 years. 

Another VA Home Loan Benefit for Veteran borrowers is that borrowers are not required to pay outstanding charged off and collections accounts to qualify for the loan.   

VA Loans Cost and Fees   

With VA home loans the borrower does not have to pay anything in the closing costs or any advance payment. Does this mean that there are no costs associated with a VA mortgage loan? No, that’s not the case. The closing costs apply on purchase and refinance mortgage transactions. However, these closing costs should not be a major problem for lenders, as they can be covered by the lender credit or seller concessions. 

However, buyers need some money to make an advance payment when they buy a home. Sellers need a payment of earnest money that can range somewhere between $500 and $1000. The earnest money applies to closing cost and advance payment. Any down payment is not required for borrowers to pay and this lender credit or sellers concessions generally cover closing costs, earnest money is reimbursed to the home purchaser at the time of closing. 

Most companies require the debtor to prepay the cost of home appraisal, which is usually less than $ 500. Another price that Veteran buyers have to pay in advance is a house inspection.  

Mortgage lenders require appraisal to ensure that there is sufficient collateral for a loan. Upon completion of the purchase contract (signed by the seller and the buyer), the lender sends an appraisal. The appraiser will give their idea of ​​the value of the house and the borrower should pay the appraisal fee. Borrowers do not participate in the selection of an appraiser to ensure that the process remains neutral. 

In the case of a VA mortgage, an assessment is performed by an authorized VA expert to determine the value of the home and to ensure the security and cleanliness of the borrower and his family. The assessment will be verified by the lender when it is completed to ensure that it meets the underwriting criteria of VA. Then an appraisal copy will be sent to the borrower. 

Appraisal is not a review of an apartment. To check for faults and maintenance problems, a qualified inspector must be contacted to perform a complete internal inspection. 

Although the VA does not require mortgage insurance, but there is a VA Funding Fee which must be paid once and this fee may be turned into the total loan balance. The costs of funding fee may vary depending on the nature of the service, the veteran and the down payment. Borrowers using VA loans for the first time to purchase a home may be subject to VA funding fees of 2.15% of the total loan amount. However, veterans who can pay an advance payment of more than 10% pay only a 1.25% funding fee. National Guard Members and Reservist must pay 0.25% of the additional funding fee than service members. Veterans who are using VA mortgage for second time should have to pay 3.3% of the financing fee. The initial funding fee of VA loan is being waived off for disabled veterans whose disability is service related. VA funding fee can be paid on loan, so Veterans do not have to pay for it in cash at closing. 

Limit on VA Loans   

The maximum amount that home buyers can borrow from a VA home loan is $ 453,100 in 2018. However, in some high-cost areas, the VA loan amount is limited to $ 679,650. 

Requirements of VA Lenders Vary   

The most important fact of a VA loan that Veteran borrowers should know is that not all lenders have the same conditions for such a loan. The minimum credit score requirement and the no down payment for mortgage loans are correct, but some lenders do not give loans to borrowers with low credit scores or sometimes lenders ask for a down payment from borrowers. They make additional demands over VA requirements. 

The additional mortgage loan requirements established by the US Department of Veterinary Affairs (VA are known as lender overlays. Lender overlays makes it difficult for veteran borrowers to qualify for a VA mortgage loan. The VA lenders are free to add their proposals in addition to the VA requirements. Lenders establish overlays because they want to reduce the risk on the mortgage. While VA loans are guaranteed by VAs, lenders still suffer a partial loss if the borrower does not repay the loan. 

Veteran borrowers with higher debt-to-income ratio or low credit score are likely to be prone to housing events, such as foreclosures. Therefore, the requirements like debt-to-income ratio, loan-to-value ratio are being established by lenders to the loan risk management and keep the risk low. Some lenders may not qualify a borrower if their credit rating is below 620 or the debt-to-income ratio is more than 43%. Veterans cannot get a mortgage if they have bankruptcy or late payment problems. Most of them have no problems getting a VA loan after bankruptcy. 

For veteran borrowers, getting a VA loan from the lenders who have set their own requirements can be difficult. Therefore, they must find lenders that strictly follow VA guidelines. The point is that it is not necessary that if one lender rejects the veteran borrower from VA loans then the others will reject him too. Some lenders follow VA recommendations and have no overlays. Veteran borrowers with low credit score and a high debt-to-income ratio can qualify for a VA loan from these lenders. 

If you have been denied a home loan or have any questions about real estate or mortgage please contact the author, Matt Herbolich, MBA, JD, LLM by phone or text at 786.390.9499 or by email at mherbolich@usa-mortgage.com. Mr Herbolich works when you work, so feel free to contact him any time. 

Matthew Herbolich
Matthew Herbolich
Mr. Herbolich is a Senior Loan Officer at USA Mortgage, #NMLS 227262. He is an expert not only in lending but multiple facets of real estate, particularly the title industry. Matt trains his fellow loan officers on title industry topics, real estate investing, and countless mortgage guidelines. Have any questions? Call at 888-900-1020 or send email to: mherbolich@usa-mortgage.com

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