One of the biggest benefits of serving in the armed forces is access to VA loans. These are mortgage loans issued through the Department of Veteran Affairs. Although the loans mention “veteran” in the name, they are not reserved for those who have fulfilled the obligations to the military. Active service members and some widows of veterans can also receive VA loans for veterans.
Similar to other mortgage programs backed by the federal government, VA loans are issued by private banks. Are you located in Texas or looking for a home using VA loans in Texas? Keep reading for everything you need to know about VA loan requirements.
Requirements for VA Loans in Texas
Borrowers must first meet basic VA loan requirements prior to applying. Applicants must have served 81 days of peacetime service. Ninety-one days of wartime active duty service, or a minimum of six years of service in the Reserves or National Guard.
For a spouse to qualify, they must meet one of the following requirements:
• The service member must have died of military-related causes
• The service member was missing in action or a prisoner of war for at least 90 days
• Surviving spouse has not remarried
Required Income
Unlike most loans, VA home loans have more flexible requirements. Instead of using the debt-to-income ratio, lenders determine eligibility based on whether the applicant can pay the mortgage and other expenses using their existing income.
Borrowers with low debt like car payments, credit cards, and living expenses will qualify for a larger mortgage. The max VA loan amount is $548,250, but you can apply for a VA Jumbo loan if you need a larger mortgage.
Credit Score
Loans for veterans through the VA, do not have a credit score requirement. Since the loans aren’t processed by the VA, banks and other mortgage lenders will have credit requirements.
The lenders do take into consideration the loans are backed by a guarantee in case the borrower defaults; therefore, credit score requirements are often relaxed and in the 600 range.
Bankruptcy
VA loan requirements make concessions for applicants that have experienced Chapter 7 bankruptcy. The rules indicate that lenders can disregard a bankruptcy that has been discharged for two or more years. There are allowances for the lender to make a determination on bankruptcies discharge between years 1 and 2.
For Chapter 13, the borrower must show twelve months of consistent payments.
Types of Loan
There are different types of VA loans. Let’s look at the most popular.
VA Home Loans
VA home loans are loans for the purchase of existing homes. The process of finding a home is simple. Create a list of must-haves and get with a realtor.
VA Construction Loan
VA construction loans are short-term loans that cover the purchase of land and the cost of building the home. Upon completion, the loan is converted to a standard VA home loan.
Do You Qualify for a VA Loan?
Don’t go through the hassle of trying to get a traditional bank loan if you meet the eligibility for VA loans in Texas. The process is easy and you earned the benefits.
If you have your Certificate of Eligibility, consider Trinity Oaks Mortgage to help with your mortgage financing. If you’re ready to start the application process. Click here to apply today.
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