Florida VA mortgages, guaranteed by the Department of Veterans Affairs (VA), are available to millions of veterans and active military personnel, and they’re one of the few ways borrowers can buy a home without a down payment. The VA doesn’t loan money directly, but partially guarantees loans made through VA-approved private lenders. That means VA loans are generally easier to qualify for than conventional mortgages. If you’re a qualified veteran, here are some things you should know about your VA home loan benefit:

  • Compare Loans: While lenders must be approved by the VA, interest rates and loan terms can vary from lender to lender. Don’t worry about multiple credit reports affecting your score; as long as they all occur within a month or so, credit bureaus will treat them as a single inquiry.
  • Adjust Your Numbers: VA loans have a couple of crucial financial requirements. One is your debt-to-income (DTI) ratio, which is your total monthly debt payments as a percentage of your total monthly income. The VA requires a DTI ratio of 41% or less. The 2nd requirement is your residual income, which is the amount of money you have each month after your mortgage and other bills are paid. Both of these numbers can often be tweaked by adjusting your desired loan amount.
  • Up-Front Costs: Though VA loans often allow veterans to buy homes without a down payment, some money will be required. You’ll need funds for a deposit, a VA appraisal, and, ideally, a home inspection. You may be able to get that money back at closing, but you’ll still need it to begin the process. Make sure your agent includes contingencies to protect your deposit, such as a contingency that stipulates that you get your money back if the appraisal or inspection shows problems. And since we mentioned appraisals …
  • Remember the Appraisal: To protect veterans, the VA requires any home purchased through their program to meet minimum standards. The home must be evaluated through the VA appraisal process, and any problems have to be corrected before the loan can close. However, the veteran can’t be the one to make the repairs. So, fixer-uppers can be a problem. While you can buy a foreclosure or short sale using a VA loan, it will need to be in good shape. In addition to the appraisal, you should get a home inspection. They’re not required, but it’s a good investment. A home inspection is much more detailed than an appraisal, and will help you uncover potential problems.

Do Your Research: If you think you’re eligible for a Florida VA mortgage, contact Embrace Home Loans today at 407-733-6425, or browse our website. If you’ve never used your VA loan benefit, or if your real estate agent is unfamiliar with the process, we may be able to help you obtain a VA-backed home mortgage and get the most from your benefit. For more information, review the other articles in this three-part series.

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