Cash-Out Refinance vs. Home Equity Loan: Which Is Right for You?

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VA Loans: A Comprehensive Guide

Who Can Get a VA Loan?

Are you a current or former U.S. service member, or the spouse of one? If so, you might be eligible for a U.S. Department of Veterans Affairs (VA) loan, which often offers better financial terms than conventional mortgage loans. VA loans typically feature lower interest rates and may not require a down payment.

Minimum Service Requirements

Veterans and Active-Duty Service Members

The eligibility for VA loans depends on the length and nature of your service. Here are the minimum active-duty service requirements based on different periods:

• Currently on active duty: 90 continuous days
• September 16, 1940 – July 25, 1947: 90 total days
• July 26, 1947 – June 26, 1950: 181 continuous days
• June 27, 1950 – January 31, 1955: 90 total days
• February 1, 1955 – August 4, 1964: 90 total days
• August 5, 1964 – May 7, 1975: 90 total days
• May 8, 1975 – September 7, 1980: 181 continuous days
• September 8, 1980 – August 1, 1990: 24 continuous months
• August 2, 1990 – present: 24 continuous months

National Guard and Reserve Members

For National Guard and Reserve members, the requirements are:

• August 2, 1990 – present: 90 continuous days of active duty
• Any time period: Six creditable years in the selected reserve or National Guard

VA Home Loan Requirements

To qualify for a VA loan, you must meet three primary criteria:

1. Certificate of Eligibility (COE): This document confirms your eligibility based on your military service. You can obtain it through the VA website, by mail, or your lender can request it for you.
2. Stable Income: Lenders will assess your income to ensure you can make monthly loan payments. They will look at your debt-to-income ratio, which should generally be 41% or less.
3. Credit Score: While VA loans have more lenient credit score requirements, most lenders prefer a FICO® Score of 670 or higher.

How to Apply for a VA Loan

Follow these steps to apply for a VA loan:

1. Confirm Your Eligibility and Get a COE: Request a COE through your lender or online.
2. Look for VA Lenders: Check with banks, credit unions, or your local VA Regional Loan Center.
3. Get Prequalified: This gives you an estimate of how much you can borrow without affecting your credit score.
4. Compare Loans and Choose a Lender: Use tools like mortgage calculators to compare different loan terms, interest rates, and fees.

Frequently Asked Questions

Do VA Loans Require Mortgage Insurance?

No, VA loans do not require private mortgage insurance (PMI).

What Documents Do I Need for a VA Loan?

You’ll need a Certificate of Eligibility (COE), proof of income, and a credit report.

Does a VA Loan Get You a Better Rate?

Yes, VA loans often come with lower interest rates compared to conventional loans.

The Bottom Line

Before applying for a VA loan, review your credit report and score. If your credit needs improvement, take steps to enhance it by paying down debt and ensuring timely bill payments.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We’re here to help you achieve your dream of homeownership with the best financial terms available.

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