Find a Home

Slideshow

HallDoran Realty
HallDoran Realty
HallDoran Realty
HallDoran Realty
Preview is unavailable

Main Content

VA Purchase & Financing

VA Purchasing & Financing

Advantages for Military Homebuyers

The VA Loan has many advantages that make it one of the most appealing paths to homeownership for — and this great benefit is reserved exclusively to those who bravely served our country and select military spouses.

When combined, the benefits of the VA mortgage allow service members and Veterans to take advantage of substantial cost savings under qualification requirements designed specifically for members of the military and their unique needs.

Video: Explore VA Home Loans

First-Time Buyers

No down payment and relaxed credit standards means loans from the VA Program are especially helpful for first-time homebuyers.

Easier to Qualify

The VA Loan Program provides homeownership opportunities for millions who wouldn't otherwise qualify for conventional financing.

No Down Payment

The VA Home Mortgage is one of the only home loans available today with no down payment required.

Lower Payments

Competitive interest rates and no private mortgage insurance mean lower monthly payments.


VA Loan vs. Traditional Mortgages

Military homebuyers have access to one of the most unique and powerful loan programs ever created. See how the VA Loan compares to a traditional home mortgage

VA Loans

Conventional Loans

0% Down

(for qualified borrowers)

VA Loans are among the last 0% down home loans available on the market today.

Up to 20% Down

Conventional loans generally require down payments that can reach up to 20% to secure a home loan, pushing them out of reach for many homebuyers.

No PMI

Since VA Loans are government backed, banks do not require you to buy Private Mortgage Insurance.

PMI Required

Private Mortgage Insurance is a requirement for borrowers who finance more than 80% of their home's value, tacking on additional monthly expenses.

Competitive Interest Rates

The VA guaranty gives lenders a greater degree of safety and flexibility, which typically means a more competitive rate than non-VA loans.

Increased Risk for Lenders

Without government backing, banks are taking on more risk which, in turn, can result in a less-competitive interest rate on your home loan.

Easier to Qualify

Because the loan is backed by the government, banks assume less risk and have less stringent qualification standards for VA Loans, making them easier to obtain.

Standard Qualification Procedures

Conventional options hold stricter qualification procedures that can put homeownership out of reach for some homebuyers.


Regulations and Fees

Although the VA Loan is a federal program, the government generally does not make direct loans to veterans. Instead, private lenders finance the loan while the Department of Veterans Affairs offers a guaranty.This guaranty, which protects the lender against total loss should the buyer default, provides incentive for private lenders to offer loans with better terms.

Loan Limits

In San Diego County, as of 2019, veterans who qualify for the VA Loan can purchase a home worth up to $690,000 without putting any money down; however, with the current VA Loan Limits vary from the base rate of $484,350 or higher, depending on their desired purchase location.

Funding Fees

The VA Funding Fee goes directly to the VA to ensure the program keeps running for future generations of military homebuyers by removing any additional burdens off tax payers and veterans. The fee varies depending on the borrower's circumstances and does not apply for veterans with service-connected disabilities. For example, if this is your first time using the VA Home Loan Program, the funding fee is typically 2.15 percent of the purchase price of the home. For subsequent use of your VA Loan benefit, the fee is 3.3 percent.VA borrowers can roll the funding fee into their overall loan amount. The VA also limits closing costs for veterans and allows sellers to pay most or all of those expenses. Many of our borrowers purchase a home with no money due at closing.

 

VA Loan Eligibility Requirements

VA Loans are available exclusively to those who have served our country and select military spouses. The VA Loan is specifically known for its no down payment requirement and competitive rates.  It's ultimately up to the VA to determine eligibility for the home loan program, but prospective borrowers can get a good idea by looking at the VA's basic eligibility guidelines. VA Loans are generally available for veterans and active duty service members who meet the basic service requirements.

  • You have served 90 consecutive days of active service during wartime,
  • You have served 181 days of active service during peacetime,
  • You have more than 6 years of service in the National Guard or Reserves,
  • You are the spouse of a service member who has died in the line of duty or as a result of a service-related disability.

Determine if you are eligible for the VA Home Loan benefit based on service and discharge requirements.


How to Apply for a VA Loan Certificate of Eligibility (COE)

While you don't need your VA Certificate of Eligibility in hand to start the loan process, this certificate is a very important part of your loan application. Your COE verifies that your length and character of service make you eligible to use the VA home loan benefit.

You can apply for a VA Loan Certificate of Eligibility three different ways:

  1. Apply through a VA approved lender
  2. Apply online through the VA’s eBenefits portal
  3. Apply by mail with VA Form 26-1880

VA Loan Income Requirements

Homebuyers interested in the VA Loan aren't required to reach any kind of income threshold to use their home loan benefits; however, borrowers are expected to have stable, reliable income that will cover monthly expenses – including their new mortgage payment.

Additionally, the VA requires that borrowers maintain a certain amount of income left over each month after all major expenses are paid. The excess is meant to cover typical family needs, such as food, transportation and so forth and is referred to as residual income. Residual income is a large reason why the VA Loan maintains one of the lowest foreclosure rates of all major lending options.

By enforcing residual income requirements, the VA increases the chances of its borrowers earning sufficient income to meet all financial obligations, and also ensures borrowers have a cushion in the event of an emergency.


Additional Eligibility Requirements

Although the VA determines the guidelines for those who are eligible for the VA Loan benefit, private lenders who finance the home purchases have an additional set of criteria a potential borrower must satisfy, including debt, income and credit requirements.

When you apply for a VA Loan, your VA Loan officer will pull your credit score from the three leading credit agencies, as well as examine your debt-to-income ratio.

Finally, a veteran applying for a VA Loan must not have been discharged under dishonorable conditions.


How to Apply for a VA Loan

The VA loan process typically takes 30 to 45 days once you’re under contract on a home, although every buyer’s situation is different. Applying for a VA loan doesn’t obligate you in any way to a particular lender or to moving forward with the homebuying process.

Here’s a look at the four basic steps to applying for a VA home loan:

  1. Familiarize yourself with the broad VA Loan eligibility requirements above
  2. Contact a VA-approved lender and start your VA Loan application
  3. Obtain your Certificate of Eligibility through your lender or on your own
  4. Finalize your loan application and provide all necessary paperwork to your lender, including W-2s, tax returns and recent bank statements
 

Purchasing a first home is an exciting milestone in any person's life. For some, the process may also seem very intimidating. A HallDoran Realty agent can help you navigate the home buying process and will work diligently to help you find the right home.

How Much Home Can I Afford?

Typically, the first question would-be homebuyers ask themselves is, "What can I afford?" There are many factors that determine what a reasonable mortgage payment should be for an individual, including annual income, existing debt payments, down payment (if any), as well as additional costs like homeowners insurance and housing association fees.

Educate yourself on the true costs of home ownership.  By planning ahead, you will know how much you can afford and avoid any surprises from unanticipated expenses.  Watch the video.

You may use this mortgage calculator to help you calculate what an affordable mortgage payment is for you.

VA Home Loans: What are MPRs?


What Type of Loan Should I Get?

There are many financing options available for homebuyers out there, each with their own unique advantages. For most veteran and active duty military members, HalLDoran Realty highly recommend the federally-backed VA Loan due to its distinct benefits over traditional loans, such as:

  • No down payment unless required by the lender or the purchase price is more than the reasonable value of the property
  • No private mortgage insurance premium requirement
  • VA rules limit the amount you can be charged for closing costs
  • Closing costs maybe paid by the seller
  • The lender can't charge you a penalty fee if you pay the loan off early
  • VA may be able to provide you some assistance if you run into difficulty making payments

You should also know that:

  • You don't have to be a first-time home buyer
  • You can reuse the benefit
  • VA-backed loans are assumable, as long as the person assuming the loan qualifies

When using a VA Loan, it's important to find a real estate agent that not only knows the intricacies of the VA Benefit Program, but also understands the specific needs of veterans and active duty military members. The broker and agents of HallDoran Realty continuously take training courses to help guide you through the process of purchasing a VA qualified home and answer questions you may have. Further, we will connect you with VA approved lenders who will assist you in the loan process.


Signing A Purchase Agreement

When you find the home that is right for you, your HallDoran Realty agent can help you develop an offer, create the sales contract, and assist you with the negotiation process.

Remember to include in your sales contract, a contingency which voids the contract if you are unable to obtain VA-guaranteed financing.  An example of a VA Option Clause:

"It is expressly agreed that, notwithstanding any other provisions of this contract, the purchaser shall not incur any penalty by forfeiture of earnest money or otherwise be obligated to complete the purchase of the property described herein, if the contract purchase price or cost exceeds the reasonable value of the property established by the Department of Veterans Affairs. The purchaser shall, however, have the privilege and option of proceeding with the consummation of this contract without regard to the amount of the reasonable value established by the Department of Veterans Affairs."

Other contingencies to consider are an appraised value contingency and a satisfactory home inspection contingency. Your HallDoran Realty agent can advise you if these or other contingencies are typical in your real estate market.


Additional Informative Video Links

Top 5 Benefits of the VA Home Loan Program

Using your VA Home Loan Benefit: Working with a Realtor and Lender

VA Home Loans: VA Appraisal Process vs. Home Inspection

 

VA Loan Contract Guidelines

The journey to homeownership can oftentimes cause would-be homebuyers to run the gamut of emotions — from excitement to nervousness and everything in between. As the homebuying process transitions and you are under contract, it is important to remember the process is not over and there is still work to be done before celebrating.

Although rare, some homebuyers can lose focus once they are under contract. This can result in some delays to the financing process or even result in losing the opportunity to secure a loan. Your Home Loan Specialist will instruct you on important things to maintain once you are under contract.

Your VA approved lender will review your credit inquiries, bank statements and pay stubs to determine if you have debts that were not disclosed on the application. From the time you apply for the loan to the time you close, we advise you do not apply for any new debts – including co-signing on a note, buying or leasing a vehicle and refinancing other notes – without consulting your loan officer.


While Under Contract:

  • Avoid taking on new debt, such as buying a car
  • Consider putting off job changes
  • Don't move money around or change banks
  • Keep on top of your bills and don't miss a mortgage payment
  • Be mindful of credit card limits

Even though your loan may still close, your closing could be delayed while additional documentation is obtained as we work to verify all your information. If the new debt increases your debt load, there is an increased risk of changing your debt to income ratio and effectively ending your chance to purchase the home you have selected.


Flat Fee Charged By A VA Lender:

In using your VA Home Loan benefit, you may be charged a 1% flat charge by the lender (sometimes referred to as a loan origination fee), and whatever reasonable and customary amounts for any or all of the following:

  • Appraisal and Compliance Inspections
  • Recording Fees
  • Credit Report
  • Prepaid Items
  • Hazard Insurance
  • Flood Zone Determination
  • Survey
  • Title Examination and Title Insurance
  • Special Mailing Fees for Refinancing Loans
  • VA Funding Fee
  • Mortgage Electronic Registration System (MERS) Fee
  • Other Fees Authorized by VA

In many instances you can negotiate with the seller to pay part or all closing costs. To limit your closing expenses, ask your real estate agent to submit your offer with the seller paying your closing costs.


Stay In Touch With Your VA Lender

While this information may cause some trepidation, if you stay on track and follow the guidance of your approved VA Loan specialist, you have little to worry about. If you have any questions about these possible hiccups, please do not hesitate to contact your VA Loan specialist.

 

The VA Loan Process

  • Buying a house is one of the most exciting purchases we make in our lives, and to some, a symbol of achievement. Homeownership is more than just a financial investment — it is an investment in home, in family and in the future.
  • We understand that purchasing a home may cause a certain level of anxiety. Your HallDoran REALTOR® will work with you and your approved VA lender to make the process as easy as possible. After all, it's not every day that you buy a home. You should enjoy the experience.
  • The following steps to homeownership will help you be more equipped as you move forward in the homebuying process.

 


Your Steps to Homeowership

1. SELECT A VA-APPROVED LENDER

  • Only lenders approved by the U.S. Department of Veterans Affairs can originate VA mortgages.
  • Using a VA specialty lender with extensive knowledge about the VA loan process vs. a lender who only funds a few VA mortgages a year may translate into an easier and quicker loan process. 

READ MORE:  Selecting A VA-Approved Lender


2. OBTAIN YOUR CERTIFICATE OF ELIGIBILITY (COE)

  • An experienced lender can help you obtain what’s called a Certificate of Eligibility (COE).
  • The COE will prove that you meet initial eligibility standards for VA loan benefits. It will also let the lender know how much entitlement you can receive, which is the amount the Department of Veterans Affairs will guarantee on your VA loan.
  • Usually, a COE can be acquired online instantly through a lender’s portal or through the eBenefits portal on the va.gov website.
  • Those servicemembers or surviving spouses whose COEs cannot be obtained online will have to get theirs by mail. A VA lender or the VA can help direct you to the right resource for your specific situation.

READ MORE: Obtain Your Certificate of Eligibility (COE)


3. PRE-QUALIFY FOR YOUR LOAN AMOUNT (OPTIONAL)

  • Pre-qualifying is important, but not required. By choosing to complete this step you can save some time and potential surprises later in the process.
  • To pre-qualify for your loan amount, you’ll have a candid conversation with your VA loan professional about your income, credit history, employment, marital status and other factors. Giving your lender complete details during the pre-qualifying step can help prevent surprises later during underwriting.  
  • The pre-qualifying step can also reveal areas that need improvement before you can be approved, such as credit or debt-to-income ratio.
  • While a prequalification letter gives you a ballpark price range for house hunting, it does not guarantee that you will be approved for a loan, and your lender will later have to verify the information you provide.

Meeting Conditions in a Preapproval Letter

  • Your VA Loan specialist will identify a list of conditions that must be satisfied in order to finalize your VA Loan paperwork.

Examples of documents required in your preapproval process

  • Pay Stubs
  • Tax Returns and W2s
  • Employment History
  • Bank/Investment Statements
  • Evidence of Real Estate Assets

READ MORE: Pre-Qualifying For Your Loan Amount


4. GO HOUSE HUNTING AND SIGN A PURCHASE AGREEMENT

  • Work with a HallDoran REALTOR® who specializes in the VA process can help you get the most out of your benefits.
  • This is true because the VA allows certain fees and costs to be paid by the seller (if both you and the seller agree), and a knowledgeable agent will know this and help you negotiate seller-paid fees.
  • Once you’ve got a signed purchase agreement, you can move forward in the VA loan process.

READ MORE: Go House Hunting & Sign A Purchase Agreement


5. LENDER PROCESS APPLICATION AND ORDERS VA APPRAISAL

  • To finish your initial application, you will need a signed purchase contract on the home you wish to purchase.
  • Once your lender has the contract, they will order the VA appraisal.
  • Only a professional who is certified to perform appraisals to VA standards can evaluate the home being considered for VA financing.
  • The Department of Veterans Affairs gives the appraisers 10 days from order to completion barring extenuating circumstances.
  • The VA appraiser will make sure the price you’ve agreed to pay for the home corresponds with the current value. Another very important part of the VA appraisal is to inspect the home to make sure it meets the VA minimum property requirements (VA MPRs).
  • However, the VA appraisal does not take the place of a home inspection, which focuses on code violations, defects and the condition of the property.
  • If the home passes appraisal for value and VA minimum property requirements, and it’s verified by the lender that you qualify for your loan, the underwriter will give his or her stamp of approval.

READ MORE: Lender Process Application & VA Appraisal


6. CLOSE ON YOUR LOAN AND MOVE IN

  • After being approved by the underwriter, all that is left to do is close and move in.
  • During closing, the property legally transfers from the former owner to you. Closing is a step that requires you to sign documents that confirm you understand and agree to the terms of the loan. You will need to provide proof of homeowners insurance and, if required, pay closing costs. Once you’ve signed all your closing documents, you’ll get the keys to your new home.
  • While these steps may not happen in the order above or be a required part (such as prequalification), they represent the typical process for the applicant in obtaining a VA purchase loan. Your lender may need to take other steps.