Individuals hailing from the military are always imbued with much-deserved privileges, which includes a VA home loan. However, 2020 has brought about changes – veterans and those still in duty members are now given more buying power, but many people remain skeptical due to the prospect of paying higher fees.
The VA home loan changes are part of the Blue Water Navy Vietnam Veterans Act of 2019, which was designed to provide more disability benefits to the Vietnam War veterans, especially those that have been exposed to Agent Orange. The law essentially forgoes any limits, allowing borrowers full entitlement to the loan.
It may come as a surprise for many, but a little knowledge goes a long way. To ensure that you are equipped with the right information, here is a quick guide on this year’s VA loans:
- No more VA home loan limits. VA lending’s wheels have always been steady, but by removing the loan limits, experts speculate that veteran and military buyers across the country will be hopping on the borrowing train. This feature was designed with the members in mind, particularly those veterans living or stationed in costly real estate markets—due to the law, they are now empowered to use a buying power like no other. With the benefit at their fingertips, they can now gain access to homes they previously cannot afford.
While the newly reinstated buying power is undeniable, veterans and members are reminded that the removal of limits does not equate to unlimited borrowing power. They still need to procure down payment for their prospective homes. Sufficient income is still necessary, as with other credit requirements needed to qualify for the amount. Loan limits will also still be in effect for those veterans with active VA loans.
- An increase in the VA funding fee. While the increased VA funding fee has been the subject of skepticism, the fee to be paid depends entirely on your VA loan history, as well as your down payment. If you have no VA loan history yet, the fee can be paid upfront or rolled into the entire cost of the loan, whichever you choose.
If you’re applying for a VA loan for the first time, the fee will be 2.3% of the loan amount. For subsequent loans, however, 3.6% of the total will be used. Although significantly higher, the institution assures the people that they will continue to make VA loans affordable.
Applying for a VA loan in Los Angeles?
From everything gathered, you may now be planning to apply for a VA loan soon. While the percentage of fees may have gone up, the removal of limitations certainly has its merits. Unfortunately, it’s important to note that not all lenders offer VA loans. As such, you must find one with experience dealing with military service members.
Your chances of getting a loan depend entirely on your choice of lender, especially since banks offer higher rates than most. As you gather more information, keep your documents in mind and your finances ready. While the benefits may have been widened for military and veterans, you remain subject to the processes of approval, and of course, financial caveats.
With that being said, why not work with the team of Shannon Christenot? We offer you VA loans in Los Angeles, helping clients like you achieve their dream homes. With more than 20 years of experience, we’ll help you through the application process, ensuring that you are one step close to realizing your dreams. Book a consultation with us – dial (818) 601-2231 for more information.