On August 6, the VA Loan limit in Honolulu County was raised to $756,250.
What does this mean exactly?
It means VA has increased its guarantee to lenders in Honolulu County. This now allows us to offer high balance
VA loans up to the county limit of $756,250 with NO down payment. In addition, this decreases the down payment that is required of VA loan borrowers needing loans above the county limit.
How does a VA loan work that is over the county limit?
A VA Loan is guaranteed 25% by VA to the lender. In addition, when borrowing over the county limit the borrower can provide a similar guarantee in the form of equity. For example, a veteran who purchases a home for $856,250 would be $100,000 over the Honolulu County limit and would have to place a 25% down payment of $25,000. In addition, the VA funding fee cannot be financed.
What is the VA funding fee and how much is it?
The VA funding fee is charged by VA and used to finance the VA home loan program. The fee is affected by several factors, including reuse of VA Loan and type of service of the borrower, for example, active or reservist. A 5 to 10% down payment decreases the fee obligation. Disabled veterans are exempt from the funding fee obligation.
What is a VA certificate of eligibility and am I eligible?
The certificate is a document that VA issues to inform veterans and lenders whether they are eligible, how much entitlement remains, and what funding fee category they fall into. Both active duty and reservists can be eligible for a VA home loan. If you don’t have a current certificate of eligibility, you should request it, and as a VA-approved lender we can help you obtain it, often immediately.
What are the advantages of a VA Loan?
A VA loan enables a veteran to finance 100% of a property’s value with no money out of pocket and no mortgage insurance.
What about closing costs?
VA allows for a seller to pay all of your closings costs. In a situation where the seller is not providing any concessions, some VA approved lenders like us are able to give a lender credit to cover some or all of the closing costs.
What are non-allowable fees?
These are fees which cannot be paid by the veteran. Often, VA approved lenders like us will pay the non-allowable fees for our clients. It’s important for sellers to understand accepting a VA contract does-n’t necessarily mean cutting into their bottom line.
Interest rates on VA loans are often more competitive and more lenient on credit score requirements. A VA loan is one of the easiest loans to qualify for, making it possible for more and more veterans to own a home in the nation they’ve defended.
The VA loan even allows a seller to pay off the borrower’s debt.
A veteran in a VA loan can ‘streamline refinance’ with minimal documentation and sometimes no appraisal allowing them to take advantage of lower interest rates. Veterans can also refinance into their VA loan to save money on the interest rate, take cash out to pay off debt, or do home improvement.
What is the process of purchasing a home with a VA Loan?
First, you will want to get pre-approved by a VA lender. It’s important to work with someone knowledgeable about VA loans…someone you also trust and feel comfortable with. Communicate to your loan officer what you are able to pay monthly so they can translate this into a price range for a home. Also find out early in the process what types of properties are acceptable for VA financing. It’s also important that your Realtor and loan officer communicate.
Once you are in contract with a seller, it’s time to do your official loan application. Be sure the home inspection is completed prior to the appraisal. When the appraisal is turned in, the Notice of Value is issued which may include additional conditions.
When you receive final loan approval, your closing documents can be drawn and you’re on your way to the signing table. Typically your loan will fund the next day. Two days later recordation occurs and you are a home owner!
I’m always available to answer questions or to set up a free consultation for any of my fellow veterans and their families (808) 783-5815.
Mann Mortgage is a member of the Mortgage Bankers Association, Hawaii Association of Mortgage Brokers, National Association of Mortgage Bankers, and Fair Housing and Equal Opportunity (FHEO).