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How to get a VA loan in California

How to Get a VA Loan in CaliforniaHow do you get a VA loan? Not every eligible Veteran takes the same path to homeownership, but those that follow a roadmap will have an easier time than those that go about buying a home in willy-nilly fashion. Knowing the steps and following them before you begin looking at homes will help to keep you from experiencing frustration when you find out you don’t qualify for the neighborhood you’ve been searching in.

Review your Household Budget

Knowing where your dollars are going is very important. You should have your budget under control before you buy a home. How much are you currently spending on housing/rent? How much for groceries? Dining? Entertainment? Utilities? Car, gas, insurance? And how much are you able to save each month? Some people use software to track their finances, but all you really need to do is right down the numbers on a sheet of paper. Or create your own spreadsheet. Make an honest assessment of your finances. Determine what mortgage payment you could handle. You may find that there are areas of your budget that you can cut back on and you may want to increase your savings.

Contact a California VA Loan Officerdo you qualify for a California VA loan

Now that you have a good grip on your budget, it is time to contact an experienced, local, California VA Loan Officer. The loan officer will help you determine how much of a VA loan you will qualify for. The Loan Officer should be able to give you custom VA loan scenarios with a complete breakdown of the numbers. You will want to see how much the full PITI (Principal, Interest, taxes, and insurance) is for the home price you are Prequalified for. The Loan Officer will also be able to educate you on the numbers.The more you know prior to making an offer on a home, the better chance you will have of getting your offer accepted and eventually, closing the transaction. Too often loan real estate transactions fall apart because the buyer didn’t understand something with the payment or didn’t realize how much money would be needed to close on the purchase of their home. While using VA financing does not require a down payment up to the county loan limit, there are still closing costs that the buyer is responsible for. There are escrow, title, appraisal, credit report, and recording fees. Money is also needed for prepaid expenses such as interest, taxes, and insurance. There are ways to have those fees covered, either by negotiating to have the seller pay some or all, or having the lender adjust the interest rate higher to then get a lender credit. Either way, knowing what your strategy is going to be PRIOR to making an offer on a home is critical. And an experienced California VA Loan Officer will be able to get you the numbers you and your real estate agent will eventually need to confidently make an offer and buy a home.

Retrieve your VA Certificate of Eligibility

VA Certificate of EligiblityTo make sure you are eligible for a VA loan you will need to retrieve your Certificate of Eligibility. The easiest way to do this is to have the VA lender pull it for you. VA Lenders can retrieve your COE in minutes since they have access to VA’s Automated Certificate of Eligibility (ACE) portal. The COE will verify your eligibility. It will also verify whether your VA Funding Fee is waived, or if you will have a subsequent user Funding Fee. The COE also will show if your Entitlement is not fully restored from a previous loan. These are all important things to know BEFORE you make an offer on a home.

Get PreApproved for your VA Loan

Now that you are already talking with a California VA Lender and the loan officer has created custom VA loan scenarios, it is time to start the VA Loan PreApproval. These days in California, a home seller will probably not even entertain an offer from a potential buyer who is not already PreApproved. PreApproval can be a different thing to different lenders, but at the very least you should be submitting your income and asset documentation to the lender along with a completed loan application. The lender will run your credit report and get an Automated Approval. Hopefully, the lender will also have an actual VA underwriter review the documentation to verify the numbers entered on the loan application. Once you have been PreApproved for your VA loan, the lender will issue a PreApproval Letter which can be submitted with any home offers you make.

Find a Real Estate agent who is comfortable with buyers using VA Financing

Not all real estate agents understand what it takes to get an offer accepted for a buyer using VA financing. Your California VA lender may be able to refer you to a real estate agent who has experience working with Veterans to buy a home. The real estate agent should know whether or not you will need the seller to pay your closing costs. And the agent should also make sure to include certain things in the purchase contract that are required by VA (like a clear termite report).

Find a Home

california va approved condosYou are now ready to find a home that meets your qualifications, budget, payment comfort level, and other personal requirements. If you are planning to buy a condo then you will want to keep your California VA Loan Officer in the loop. The condo project needs to be VA approved for a VA loan to close. It will be easier to limit your search to those condo projects that are already VA approved. Your lender and help you and your real estate agent narrow down the search. The home search can take 1 day or 12 months. It just depends on the current real estate market and your qualification and needs. Once you find a home you will make an offer through your real estate agent. The California real estate market has been hot for the last few years, so it may take a few offers before you have an accepted offer and are “in escrow”.

You are “In Escrow”

When you are “in escrow”, this means you have an accepted offer and have given a deposit to the escrow company to “open escrow”. It typically takes between 30 and 45 days to close escrow. During escrow, the appraisal and inspections are completed, a title search is completed, and the loan is fully approved. Once the loan closes you will be given the keys to your new home. Depending on the terms of your sale contract, the sellers of the home you buy may have a few days to move out before you can move in. But at this point, you are a new home owner.

The entire home buying process can take several years for some people but may only take a month or two for those with a clear idea of the steps towards home ownership and a clear idea of the type of home (and location) they want to buy. The biggest hurdle for most home buyers is the down payment. For California Veterans, that hurdle is mostly eliminated since VA does not require a down payment up to the county loan limit. So for those California Veterans who are thinking of buying a home, figure out what your budget is and talk to a California VA Loan Officer who will prepare custom VA loan scenarios for you today.

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.CaliforniaVALoanExpert.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.

Find California Homes Eligible for VA Financing

Find VA approved homes in CaliforniaFinding homes eligible for VA financing in California is easy. Singles family detached homes are easily financed with a VA loan. VA financing even works for 2, 3, and 4 units properties, and of course VA allows for 100% financing. Where it can get tricky is when a VA borrower is interested in finding a Condominium. The condo project needs to be approved by VA for financing prior to a lender funding a VA loan within the project.

How Do I Find VA Eligible Condo’s in California?

Many VA loan eligible homebuyers will typically search for a condo and then find out if the condo is approved for VA financing. But this can be frustrating since many condo projects are not approved for VA financing. The first step should be to check the VA site for which projects are approved and then look at condo’s within those projects. So how is this done? Click Here for the VA Condo approval lookup site.  Once at the VA site, choose the “Details” report. To pull only approved condo’s, choose “Retrieve only Approved Condo’s?” Do not try entering the condo name. Leave it blank. Next, choose the city and state are searching.

 

It is important to work with real estate professionals who are familiar with VA financing. Your California VA real estate agent should know how to find VA approved condo projects and should understand how the offer to purchase should be written. Your California VA lender should thoroughly understand VA lending guidelines, loan amounts, and qualifications. And of course, have low interest rate options.

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.

Can I get a VA Loan After a Bankruptcy in California?

VA Loan After BankruptcyIf you’re wondering whether or not you can get a VA loan in California after a recent bankruptcy, you’re not alone.

With the recent economic recession just barely behind us, many veterans and military personnel are now in the position of looking for a new mortgage after having gone through a bankruptcy.

Some of the most common questions asked regarding bankruptcies and VA loans in California are:

  • Can I even get a California VA loan after a bankruptcy?
  • If so, how long do I have to wait?
  • What can I do to increase the likelihood of getting Preapproved for a new VA loan after a bankruptcy?

The good news is that as of today, the VA underwriting guidelines are more flexible than the guidelines for conventional or FHA loans.

With that said, let’s now go ahead and take a look at the different types of bankruptcies and how they impact VA loans…

Chapter 7

Chapter 7 bankruptcies are essentially when the borrower is freed of all liability from creditors. VA loan guidelines typically call for a 2 year waiting period after a Chapter 7 bankruptcy before you can receive VA financing again.

We say “typically” because there are extremely rare circumstances in which the 2 year waiting period will be reduced to 1 instead. You would have to be able to show that circumstances beyond your control (such as losing a job or medical problems) were the driving force behind your financial hardship.

This 2 year requirement may seem harsh, but compared to the guidelines for conventional loans that call for a 4 year waiting period, it really is quite reasonable.

Chapter 13

Chapter 13 bankruptcies involve the establishment of a repayment plan instead of being cleared of liability.

California Veterans and military personnel can qualify with VA loan guidelines even when they are still in Chapter 13 bankruptcy. However, you will have to show that you have made a minimum of 12 payments on-time and be approved by the court trustee for the loan.

Please note that once the Chapter 13 bankruptcy is complete, veterans are instantly eligible for VA loans again, whereas conventional loan guidelines still require a 2 year waiting period.

Even after you have finished the bankruptcy process, there are still actions you can take to increase your likelihood of qualifying for a VA loan after bankruptcy.

For example:

  • Reestablish your credit as soon as possible if you do not have any creditors after the bankruptcy process. Remember, approving a potential borrower with no credit can be just as difficult as approving a borrower with bad credit!
  • Once you reestablish credit, be sure to always make payments on time.
  • Get in the habit of checking your credit at a minimum of once a year. This will give you an idea of where you stand, especially when you begin shopping for a VA mortgage.
  • Upon the discharge of your bankruptcy, send a copy of all your discharge paperwork (including all applicable schedules) to the three credit bureaus: Equifax, Experian, and TransUnion.

Talk to a California VA lender to learn more about qualifying for a VA loan after  a bankruptcy.

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 the your scenarios so that you are able to fully understand the numbers BEFORE you have started the loan process.

Can I Take out More Than One VA Loan in California?

The short answer to the question “How many VA loans can I have in California?” is that there is no limit on the number of times eligible California veterans are allowed to use their VA loan benefits.

This answer often surprises California veteran borrowers who have used the program before.

As you are probably well aware, a VA loan offers many benefits unavailable with Conventional loans. (Learn about refinancing from a Conventional loan to a VA loan in California.)

In many ways, the procedure for getting a second (or third, or fourth…) VA loan is similar to obtaining the initial home financing.

First, veterans must be able to show that they satisfy the basic eligibility rules mandated by the U.S. Department of Veterans Affairs. The eligibility requirements can be found at the following Department of Veterans Affairs General Rules of Eligibility website.

Second, the VA loan has to be received through a lender that has been approved by the U.S. Department of Veterans Affairs. It is important to check with lenders prior to starting the to ensure that they are qualified to provide a VA mortgage. It helps to be work with a local California VA loan lender if you are planning to buy a home in California.

Third, the VA will analyze your mortgage application including your payment history on your previous loan to see if you have a history of paying your mortgage on time or have gone into default at some point.

The VA loses money when veteran borrowers go into default, which means they are essentially doing a cost analysis on you to decide whether or not to grant you another VA loan. In addition, if the VA suffered a loss on a previous loan you will be required to repay it before having your eligibility fully restored.

If you currently have a VA mortgage or have had one in the past, then you already know about the required VA funding fee. However, there are differences between what the funding fees are for first-time VA loan borrowers and subsequent borrowers. Of course, if you are considered by VA to be at least 10% disabled, then the Funding Fe can be waived.

For VA loans, regular military members are categorized as either a first time user or a subsequent user. For first time users the fee structure is set up as follows:

  • No down payment: 2.15% fee
  • Up to 10% down payment: 1.5% fee
  • More than 10% down payment: 1.25% fee

For subsequent users the fee structure is:

  • No down payment: 3.3% fee
  • Up to 10% down payment: 1.5% fee
  • More than 10% down payment: 1.25% fee

The funding fee requirement for both the Reserves and National Guard members is different than that for the regular military. For first time users, the fee structure is:

  • No down payment: 2.4% fee
  • Up to 10% down payment: 1.75% fee
  • More than 10% down payment: 1.5% fee

For subsequent users the fee structure is:

  • No down payment: 3.3% fee
  • Up to 10% down payment: 1.75% fee
  • More than 10% down payment: 1.5% fee

Basically, the only difference between funding fees for first-time and subsequent VA loan borrowers is for “no down payment” scenarios.

If you are planning on making a down payment on your subsequent VA loan, then there will not be any different from what you would pay for a first-time VA mortgage.

It’s important to understand that you may not hold more than one VA loan at a time. The loan you took out previously must be repaid in full before you will be eligible to apply for a new VA mortgage. If you still own the property but it is no longer financed with a VA loan (either because you refinanced or paid off the mortgage) you may request a one-time exception to have your eligibility restored.

Even if the loan was assumed by another party, the loan must either be repaid or if the assumer is eligible for a VA loan, they could transfer their eligibility to the loan.

If you have used your eligibility before, it is important to contact a California VA lender who can help check on your eligibility status.

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 the your scenarios so that you are able to fully understand the numbers BEFORE you have started the loan process.