One of the greatest benefits veterans receive for service to their country is VA Home Loans. Over 21 million veterans achieved the American dream of homeownership through the use of VA Home Loans. However, many veterans seeking VA loans in California believe they are no longer eligible because they used the program once before. Veterans should be clear: the program is a lifetime benefit and it never goes away.
A Brief Explanation of Entitlement
The cornerstone of the VA Home Loan programs is the veterans right to entitlement. The basic definition of entitlement is a dollar amount the Veterans Administration promises to pay back if the loans go into default, which is known as first-tier entitlement.
Qualified veterans can possess more than one VA loan at the same time using second-tier entitlement. The programs cover veterans in California seeking their first homes, and the program covers veterans who are repeat homebuyers. Thousand Oaks mortgage companies that offer VA loans allow veterans to purchase their first homes or refinance existing VA loans.
Basic VA Loan Eligibility Requirements
In order to qualify for VA loans, veterans must recognize the two types of service categories: wartime and peacetime. Veterans who served during wartime must meet a minimum number of consecutive days on active duty, and the same holds true for peacetime.
Here are the minimum service requirements to qualify for VA Home Loans (note: veterans only need to meet one or more of the requirements):
- During wartime, veterans served 90 consecutive days on active duty.
- During peacetime, veterans served 181 consecutive days on active duty.
- Veterans who served in the National Guard or Reserves must have more than six years of service.
- The spouse of a service member who died in the line of duty also qualifies for benefits.
Veterans also need a valid certificate of eligibility from the Department of Veterans Affairs. Our Thousand Oaks mortgage company uses the certificate of eligibility to verify the veteran’s right to obtain home loan benefits.
Veterans must also meet certain income and credit score requirements. Although there is no VA minimum on credit scores, the VA and mortgage companies like to see credit scores of 620 or better. The VA also uses debt-to-income ratios to determine whether veterans can afford their monthly payments. The preferred DTI is 41 percent, which is the ratio of total monthly debt to gross income.
If you’ve got any questions about VA loans or other mortgage options, feel free to call Capstone Direct today at (805) 229-6800.