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Tag: Loans

How to Qualify for a VA Loan

June 17, 2021 / / 0 Comments

The Veteran Administration’s Loan was created to provide veterans with a federally-guaranteed home loan with no down payment. It is granted by the U.S. Department of Veteran Affairs to eligible veterans and current active military members. Eligible borrowers can use it to purchase a home as their primary residence or refinance an existing mortgage. If you currently or formerly serve in the U.S. military, you may qualify. Read on to learn more about eligibility requirements and how to apply for a VA loan.

Benefits of a VA Loan

VA loans are the one of the best mortgage options for veterans and come with many benefits and advantages that allow you to achieve your dream of becoming a homeowner. This includes:

  • No down payment
  • Better terms and interest rates
  • You can apply and receive more than one VA loan
  • No private mortgage (PMI)
  • Fewer closing costs
  • No penalty fee for prepaying the loan

Who is Eligible?

As mentioned above, VA loan eligibility extends to current and former military service members, such as combat veterans and troops who served in peacetime, active-duty personnel and reservists. Spouses and surviving spouses of service members – including those who are disabled, missing in action, or held as a prisoner of war – are also eligible. The list of eligibility requirements is very specific and varies according to the date you served, the type of service, and the length of time. In a nutshell, you are most likely eligible if you were not dishonorably discharged and meet one or more of the following requirements:

  • You have served 90 consecutive days of active service during wartime (WWII, the Korean War, or the Vietnam War).
  • You have served 181 days of active service during peacetime.
  • You have 6 years of service in the National Guard or Reserves.
  • You are currently on active duty with 90 continuous days.
  • You are the spouse of a service member who has a service-related disability, MIA, or is a POW.

If you don’t meet the minimum service requirements because you were discharged, according to the U.S. Department of Veteran Affairs, you may still be able to get a Certificate of Eligibility (COE) if it was due to one of the following reasons:

  • Hardship
  • The convenience of the government (you must have served at least 20 months of a 2-year enlistment)
  • Early out (you must have served 21 months of a 2-year enlistment)
  • Reduction in force
  • Certain medical conditions
  • A service-related disability

However, if you were dishonorably discharged due to bad conduct and other grievous offenses, you may not be eligible for a VA loan. You can try to potentially qualify by applying for a discharge upgrade if you have a strong case that it was due to mental health conditions, PTSD, traumatic brain injury, and more.

Borrowing Requirements

Now that you understand the eligibility criteria, there are three more general requirements that VA loan applicants must meet. The first is obtaining a COE after providing documentation that proves your service in the military. The other two requirements are that you must have a stable source of income and an adequate credit score. There is no minimum income required to get a VA loan but there needs to be evidence of sufficient income to cover the monthly loan payments. As for your credit score, it can vary from lender to lender but most prefer at least good or better, which is at least 670+ on the FICO scale.

Conclusion

When it comes to researching and applying for loans, it can be overwhelming trying to understand all of the eligibility conditions. The process of trying to buy your dream home can be stressful without the help of professionals. If you find yourself in a difficult situation and in need of loan help, American Mortgage Resource, Inc. is here to help you every step of the way. Consult with our experts today at (617) 972-8588 and we’ll help find a solution based on your needs. For more information, visit our website to learn more about our services and loan options. 

Why Your Credit Score is Important for the Loan Process

June 23, 2020 / / 0 Comments

In order to get the best deals and rates on a home loan, you need to have a good credit score. Mortgage lenders are going to look to see if you are a responsible borrower and making your payments on time. Additionally, your credit score can provide the information a lender needs to determine your eligibility, including which rates they are going to offer and what type of loan you qualify for. Continue reading to understand how your credit score is important for the loan process!

Are You Credit Worthy?

Before you begin shopping for loans, have your credit score ready to go. Check online with an accredited website for the most accurate results. It’s important to mention that most lenders are going off of a FICO credit score, which ranges from 300-850. If your credit score falls under the category of “fair” or better, you’re in the average range for an American borrower.

Is Your Credit Enough for a Home Loan?

According to Meridian Banker, “the credit score needed to buy a house greatly depends on the type of home loan you apply for.” Some of the most common loans you are going to come across are conventional loans, FHA loans, and VA loans. These loans start at a minimum of 500-620 or higher. FHA loans are beneficial for borrowers with low credit scores, while conventional and VA loans are better if you’re in the “good” or “very good” range.

What about Rates?

The higher your credit score, the lower your rates are going to be. The amount you’re paying back on the loan is greatly affected by the rate at which it’s set. Essentially, a lower rate is going to save you more money over time. This is why having a good credit score can expand your loan options, while also giving you better rates in the long run.

Conclusion

For more information about the loan process and what it involves, the professionals at American Mortgage Resource, Inc. are here to answer your questions. We want you to be confident in your financial decisions, so call us at (617)-972-8588 or visit our website to send a message. We look forward to hearing from you!

The Ultimate Checklist for a Mortgage Pre-Approval Letter

December 27, 2019 / / 0 Comments

When you’re ready to start shopping for a home, it’s good to come prepared with a pre-approval letter. Marilyn Lewis from NerdWallet states that “unlike a pre-qualification, a preapproval letter lends weight to your bid on a home, proving to sellers that you have the financial clout to stand behind your offer.” From bank statements to W-2 forms, we’ve made a checklist of the most important documents you’ll need to have on hand. Keep reading to find out more!

Employment Records and Income

Your income can be confirmed in a couple of different ways, some of the easiest forms being a tax return or a W-2 form. The tax return copy will need to be two of your most recent federal and state returns. As for your employment records, these documents may vary depending on your source of income:

  • Salaried or hourly workers with a company: a W-2 form and recent payroll stubs can be submitted.
  • Self-employed and independent contractors: may use their 1099 forms and income tax statements. Lenders may also require a Social Security Number to verify employer’s name and address, hire date, and/or credit scores.

Assets

Another part of the pre-approval process is organizing your list of assets. These records can be anything from bank statements to investment accounts. The more assets you can verify, the better chance you have at qualifying for a higher mortgage loan. Your lender will want copies of additional documents such as:

  • Bank statements: a copy of statements for every account whose assets you’re using to pay off the mortgage with. Include blank pages of the statements.
  • Investment statements: copies of IRA statements and investment account information for 401(k)’s, stocks and bonds, etc. Include blank pages of statements.

Debt

Monthly debt will also be used to prove you’re making payments to your loans and other balances. Lenders will want to get a comprehensive list of your monthly debt payments and the following information along with them:

  • Auto Loans: Loan balance and proof of payments, even if it’s the minimal amount
  • Student Loans: Remaining balance with the loan company’s name and address
  • Mortgage: a copy of the most recent statement with loan balance, account number, lender’s name and address, and monthly payment
  • Credit Cards: Copy of payments to each card and remaining balance

Quick Tip: If you do not have a credit history, you can still show proof that you’re making monthly payments with paperwork showing utility bills or other regular payments.

Conclusion

Our pre-approval list features a few of the records you will need to be approved for a loan. However, further documentation may be needed to qualify. To get in touch with a professional loan officer, contact American Mortgage Resource, Inc. Our experts can walk you through the process so you know if you’re qualified for a mortgage loan. For more information, visit our website today!

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