The Certificate of Eligibility (COE) is an important step in starting the VA loan process. This document declares your eligibility for the VA loan program. When looking to start the loan process, you can either get the COE yourself or have your California VA lender request it for you. The fastest and easiest way to retrieve your COE is to have your lender do it.
Regardless of which way you decide to obtain your Certificate of Eligibility, you will need to provide proof of service for your lender. If you served in the armed forces you will need to provide your DD214, which is also known as the Certificate of Release or Discharge papers, for your proof of service. Copy 4 of the DD-214 is the preferred version for the VA program because it provides the most details regarding your service. For members of the national guard and reserves, you will have to show your most recent annual retirement summary as their proof of service. You can still submit a request for a COE even if you don’t have a proof of service form because in some cases the VA can determine your eligibility based on their own records.
If you decide to go about obtaining your COE yourself there are a couple different ways that you can go about getting it. You can use the VA online ebenefits portal, visit your nearby regional loan center or mail in the needed documents. If you decide to have your lender get the COE it is a much simpler and quicker process. If you have your lender request the COE, all you need to do is provide them with your proof of service. In some cases, your lender may be able to retrieve your COE in minutes without the proof of service. Lenders are able to use the VA Automated Certificate of Eligibility portal to request your COE and determine your eligibility in a matter of minutes. In some cases, the automated portal will be unable to make a decision but it will still be a faster process for your lender to get the COE. Even if you have already received your Certificate of Eligibility, your lender will still go online to pull an updated version, so having the lender pull it in the first place is the best way to go in most cases.
Authored by Tim Storm, an Orange County VA Loan Officer specializing in VA Loan. MLO 223456. – Please contact my office at the Home Point Financial. My direct line is 949-640-3102. I will prepare custom VA loan scenarios which will be matched up to your financial goals, both long and short-term. I also prepare a Video Explanation of the your scenarios so that you are able to fully understand the numbers BEFORE you have started the loan process.
What are “VA loan limits”?
The Veterans Administration (VA) sets a maximum loan limit for what a qualified Veteran home buyer, with full entitlement, can borrow without making a down payment. This VA loan limit is calculated based on the average price a home is selling for in that county. That means that all across California, the limits will be proportional to the cost of buying in that area. In counties such as San Francisco and Santa Barbara, the limit will be significantly higher than in a county with lower housing prices like Placer and Merced. The loan limits are not in place to say that you cannot buy a house for a higher purchase price. If you have your eye on a home in a higher price range (i.e. Jumbo VA Loan), you as the buyer, will be responsible for coming in with 25% of the difference between the loan limit and the purchase price. That is a favorable formula for Veterans, and Jumbo VA loans are quite common in the more expensive areas of the state.
How will this benefit California Veterans?
VA loans are already an affordable option for Veterans and their families solely by offering a no down payment loan. They take this a step further by keeping loan limits relevant to housing prices in each individual county. As we know, the prices of homes in California have gone up and are not showing signs of coming down any time soon. While the average American has not been priced out of a home just yet, there is a real need for a cost-effective purchase option. You get that experience with VA financing.
It is important to mention that while financing a condo with a VA loan is also possible, the condo needs to be within a VA approved condo complex. Figuring out which condo complexes are VA approved is not that easy. This is where working with a California VA loan expert is critical. And while there is a method for looking up VA approved condos, there is a great website in Orange County, CA for those Veterans looking to buy a condo with VA financing in Orange County. www.OrangeCountyVACondos.com makes finding VA approved condos in Orange County very easy.
Let’s look at a few of California’s county loan limits:
|2017 California VA Loan Limits|
|San Francisco||$636,150||Santa Barbara||$625,500||Sonoma||$595,700|
As you can see in the chart above, the loan limits vary from the $424,100 – $636,150 mark. That is a wide range of purchase prices to look into when starting your search. The standard VA 100% loan limit in 2017 is $424,100. For “high cost” counties, such as Orange, San Diego, Los Angeles, or Alameda, the 100% limit can be as high as $636,150. you see above that some counties fall somewhere in between the base $424,100 limit and the max $636,150. Having a 100% VA loan limit in Orange County this high is viewers helpful to those Veterans looking to buy a home in Orange County.
Consider the scenario below assuming you are buying in Fresno, Riverside, or Yuba county:
Purchase Price: $424,100(<–Anything higher than this, the buyer will need a down payment equal to 25% of the difference between the loan limit and purchase price = Jumbo VA Loan)
Down Payment: 0%
Base Loan Amt: $424,100
VA Funding Fee 2.15%: $9,118- (assuming this is first time use for Regular Military with no Disability waiver)
Total VA LA: $433,218
When broken down like this, you can get a solid idea of what your actual costs will be when you purchase in California. This is also why it is important to work with an experienced California VA Loan Expert. The California VA Loan Expert will aim to present you with a breakdown, even more detailed than this one, that itemizes the costs that are involved when buying a home. The breakdown, or loan scenario, will give you an idea of what you can afford based on the submitted paperwork, and can assist you with the loan process to ensure it moves swiftly and smoothly.
By offering these high loan limits, VA is widening the spectrum of Veterans who now can afford to buy a home in their preferred county within California. And for those California Veterans looking to purchase a home that is priced above their counties 100% financing limit, the Jumbo VA loan also is very favorable compared to any other type of financing.
Authored by Tim Storm, an Orange County VA Loan Officer specializing in VA Loan. MLO 223456. – Please contact my office at the Home Point Financial. My direct line is 949-640-3102. www.OrangeCountyVALoans.com. I will prepare custom VA loan scenarios which will be matched up to your financial goals, both long and short term. I also prepare a Video Explanation of your scenarios so that you are able to fully understand the numbers BEFORE you have started the loan process.
The VA loan program is an amazing benefit for our veterans in California. Surprisingly, there are thousands of veterans in California that haven’t used the program because of some longstanding misconceptions about VA loans. Here is the truth behind 4 of the most popular myths regarding the VA loan program…
Myth #1: You need to have perfect credit for a VA loan.
Any credit limit (minimum FICO score) that a lender gives you for a VA loan is a lender imposed limit. The VA does not have specific credit requirements for loans so every lender is different. Most lenders will look for a credit score of at least 620, but some will go even lower, with some lenders going as low at 580. If the first California VA lender you try doesn’t accept your loan request it may be worth looking to see if you can find a California VA lender that will.
Myth #2: VA loans take longer to close than other loans
Many think that the VA loan process is a slow and cumbersome process. However, it has become much faster and a much more streamlined process. According to Ellie Mae, VA and conventional loans both on average close in about 44 days. But for a California lender who specializes in VA loan, even 44 days sounds long. Under 30 days is possible in most circumstances. Also, VA loans are much more likely to close compared to conventional loans.
Myth #3: VA loans are much riskier
Since no down payment is needed for a VA loan many think it is a riskier loan. Even with no down payment, VA loans have the lowest foreclosure rate compared to any other conventional program. Other requirements like “residual income” help to solidify the safety of the VA program.
Myth #4: VA loans can only be used one time
This might be one of the biggest misconceptions about the VA loan program. There are many veterans that think this is only a one time perk or their eligibility expires after a certain period of time, but this is not true at all. VA loans are a lifelong benefit that can be used multiple times. Eligible veterans have a basic entitlement that represents their ability to use the program. As they pay off their first VA loan, that entitlement restores and are then able to use the VA program again. It is even possible to have more than one VA loan at a time. For example, in high cost counties like Orange County, CA, there is a “bonus entitlement”. The bonus entitlement allows a California Veteran to purchase another home with no down payment. For someone looking to see what their options are while still owning a home with VA financing a true California VA Loan Expert should be consulted.
Authored by Tim Storm, a California VA Loan Officer specializing in VA Loans. MLO 223456. – Please contact my office at the Home Point Financial. My direct line is 949-640-3102. I will prepare custom VA loan scenarios which will be matched up to your financial goals, both long and short term. I also prepare a Video Explanation of your scenarios so that you are able to fully understand the numbers BEFORE you have started the loan process.