1. What is the main benefit of the California VA loan?
Getting a VA loan in California allows you to finance 100% of your purchase price. These days, 100% financing outside of the VA Loan program is next to impossible.
2. Can I use the VA Loan for a refinance?
Yes, you can refinance from any type mortgage into the VA Loan program. VA cash out refinances allow for the largest cash out and loan to value limits. VA to VA refinances are called IRRRL loans and they are one of the fastest and easiest of VA refinance loans to get. There are restrictions regarding loan limits depending on which California County you live in, so your safest bet is to call a trusted VA Approved Lender to get all your questions answered.
3. What happens after I’m Pre-Qualified?
After you are Pre-Qualified, you will want to work with a realtor to start visiting properties that fit your pre-approved budget.
4. What if I am not able to qualify?
Don’t worry. The VA Home Loan process in California is much easier than conventional financing, but if you can’t qualify now, make sure you are working with a VA Approved Lender who can show you what is needed to get qualified in the future.
5. What is an acceptable DTI for qualification?
There is no hard and fast rule for this. Most often, your debt ratio will need to stay below 50%. In some cases, it is possible to be approved with a DTI higher than 50%. The best thing to do is to speak with a VA Approved Lender regarding your qualification.
6. What is Debt-to-Income Ratio?
Your Debt-to-Income Ratio, or DTI, is defined as your total monthly obligation divided by your total gross monthly income. This can be a bit complicated to compute, with many factors playing a part, so make sure you have an experienced, VA-Approved Lender who can calculate your debt ratio with you.
7. What Credit Score do I need to qualify for a VA Loan?
Typically, a credit score of 580 is required in order to obtain VA financing. Right Choice Mortgage has programs that will work with a 550 score. Sometimes when your score is lower, it’s a good idea to work on fixing a few items on your credit as the higher the credit score, the lower the interest and payment will be.
8. Am I eligible for a VA Loan?
If you are serving in the military or honorably discharged, you have most likely earned the right to purchase a home in California using your VA Loan Benefit.
Active Duty members need 90 days during wartime or 180 days during peacetime. Reservists must complete their 6-year commitment to be eligible for VA Loan Benefit.
9. How do I Qualify for a VA Loan?
Once you know you are Eligible for the VA Loan, the next step is to Pre-Qualify. Getting Pre-Qualified means taking a look at your financial history (credit) and finding out how much you can afford. Ie: What is your Maximum purchase-power? (What price range homes should you be looking at?) Contact a trusted VA Approved Lender to get started today.
10. What are other Benefits of the VA Loan?
VA Loans in California are government-backed, meaning they offer lower rates and fees compared to other loan programs The VA Loan program also allows you to negotiate your closing costs to be paid by the seller. VA loans also allow gift funds to cover the closing costs. This allows you to close your loan, with little to NO money out-of-pocket.
The Veterans Administration has a one time fee called a VA Funding Fee. This fee is usually financed into the loan. When financed, the loan amount can exceed the sales price of the property. The funding fee varies, depending on previous usage, amount of down payment (If any) and eligibility status.
Current VA homeowners also have the option to Streamline Refinance (VA IRRRL) at current market rates, lowering payments and freeing up extra monthly cash flow.
The Top 10 VA Questions was brought to you by Jackie Barikhan of Right Choice Mortgage. Jackie has helped many military members arrange VA financing throughout California. She keeps the complex nature of the industry explained in the easiest of terms.
If you need help with your VA Loan or have other VA Home Loan Questions, give Jackie a call at 949 600-0944 or visit www.mylenderjackie.com for more great info on VA loans in California.