How to get zero mortgages for Veterans

Department of Veterans Affairs (VA)

The U.S. Department of Veterans Affairs (VA) is offering mortgage financing with no down payment to qualifying veterans. The VA has designed this mortgage, which is guaranteed by the Veterans Administration, as a long-term financing option for eligible U.S. veterans or their surviving spouses . A veteran can apply for his or her Certificate of Eligibility from the Veterans Administration to determine if he or she is eligible for a VA mortgage. This type of mortgage allows the eligible veteran to purchase a residential property with no down payment. A financing fee charged by the Veterans Administration (ranging from 0% to 3.3% of the sales price) is typically added to the mortgage amount. This type of loan also allows the seller of the property to pay for the veteran's usual closing costs and prepayments. This allows most veterans to purchase the home with little or no money down.

The VA mortgage has a restrictive debt to income ratio, which is 41% of the borrower's income. All debts, including the mortgage payment, installment loans, revolving debts, child care expenses, child support, are included in the debt-to-income ratio. In addition, this type of loan requires the veteran to meet residual income requirements set by the VA. Residual income is a calculation showing the income remaining after debts and expenses, which includes: taxes and utilities.

Currently, the VA provides no down payment funding for qualified veterans up to $424,100 in most areas, although this amount may be higher in designated high cost counties. Assessments are commissioned by the Veterans Administration and conducted by certified appraisers. The funding fee charged for this type of loan is generally waived for disabled veterans.Although the Veterans Administration insures the mortgage for veterans, applicants must be qualified for the mortgage by a licensed mortgage lender. Credit history and an acceptable credit score will affect the ability to be approved for any type of mortgage loan.

The documents required for a VA loan are as follows:

- A copy of the DD214

- Certificate of Eligibility

- Last 2 paystubs or proof of income source

- Bank statement for the last two months

- Federal tax returns from two years ago

- W2s/1099s for the past 2 years

- Divorce or separation agreement (if applicable)

- Bankruptcy schedules and discharge document (if applicable)

Preparing for a mortgage will save you headaches and frustration. If you get your affairs in order and use a reputable, knowledgeable lender who is experienced in handling VA mortgages, your home buying experience will be more enjoyable. Find out about your lender's reputation and track record. Ask family and friends who they have used for their mortgage financing. A personal recommendation from a friend or family member will make you feel more comfortable.