1. Obtain COE 

A Certificate of Eligibility (COE) can be obtained with your lender’s help or by you online at the Veterans Information Portal (VIP). The COE provides important information to the lender about your eligibility and entitlement.

2. Pre-Qualify

Give your lender all the information about your income, debts and assets upfront so you can get a good idea of how much you can afford to borrow.  Pre-qualifying is just an estimate.  The VA loan underwriter will verify that you are a satisfactory credit risk later in the VA loan process.

3. Property Eligibility

VA mortgages are for primary residences like single family homes, townhomes, VA-approved condos, multi-family dwellings (one fourplex per borrower) and some manufactured homes (secured to a permanent foundation).  Properties financed with a VA loan must have an appraisal and compliance inspection for value and safety.

4. Appraisal

The VA appraiser will evaluate the property to determine fair market value and safety compliance.  The home should appraise at or above the purchase or refinance price.  If it’s determined is unsafe, then safety issues are usually required to be fixed before closing.

5. Underwriting 

A VA underwriter uses income documents, credit reports, the appraisal and other documents to finalize your VA loan application process. The underwriter’s role is to certify to the VA that the borrower is a satisfactory credit risk.

6. Closing 

A title company will be used to close your loan.   You will sign loan, title and other documents at your VA loan closing.  If buying a home, you can move in within the time specified after closing – often within 24 hours.

The VA has extended the deadline for Persian Gulf War veterans to establish eligibility for VA benefits for undiagnosed illnesses. As VA Secretary Eric K. Shinseki explained, “Not all the wounds of war are fully understood. When there is uncertainty about the connection between a medical problem and military service, veterans are entitled to the benefit of the doubt.

This is a critical decision as many returning servicemembers from the conflicts in Iraq and Afghanistan have developed a range of medical problems. Some Gulf War Veterans exhibit a cluster of medically unexplained chronic symptoms that can include fatigue, headaches, joint pain, indigestion, insomnia, dizziness, respiratory disorders, and memory problems. It’s still unclear what role, if any, chemical weapons, environmental hazards, and vaccinations have played. Many of these medical issues remain undiagnosed or poorly understood. However, the VA presumes certain chronic, unexplained symptoms existing for 6 months or more are related to Gulf War service without regard to cause. These “presumptive” illnesses must have appeared during active duty in the Southwest Asia theater of military operations or by December 31, 2016, and be at least 10 percent disabling. The conditions include Chronic Fatigue Syndrome, Fibromyalgia, Functional Gastrointestinal Disorders, and undiagnosed illnesses including, but not limited to, abnormal weight loss, fatigue, cardiovascular disease, muscle and joint pain, headache, menstrual disorders, neurological and psychological problems, skin conditions, respiratory disorders, and sleep disturbances.

Originally, any undiagnosed illnesses used to establish eligibility for VA benefits had to be evidenced by December 31, 2011. Under the new rules, veterans have until December 31, 2015, to file.

For more information on undiagnosed illnesses of Gulf War Veterans, go to: http://www.publichealth.va.gov/exposures/gulfwar/

Peter S. Gaytan is the author of For Service To Your Country – Updated Edition: The Essential Guide to Getting the Veterans’ Benefits You’ve Earned (Citadel, 2011), available from Amazon, Barnes and Noble, and other booksellers. He has served as an advocate in securing and protecting the earned benefits of America’s veterans for more than a decade. Gaytan is the Executive Director of the American Legion, the largest veterans service organization in America.

Many veterans of the Iraq and Afghanistan wars are reluctant to seek help from VA. A study to be released this month by the Centers for Disease Control and Prevention (CDC) found that only 51 percent of new veterans have sought the services of the Department of Veterans Affairs.

CDC researchers found several problems that result in younger vets failing to seek VA help. First, some younger veterans may be unfamiliar with the VA system. Second, some live too far from a center. Third, and most troubling, some doubt the quality of care they would receive. A fourth issue, as expressed by some veterans, is more personal. They don’t want to admit that they need help.

VA officials acknowledge that they need to develop better ways to reach younger vets – and social media is playing a new and larger role. VA has launched individual Facebook pages for each of its 152 medical centers. According to Brandon Friedman, VA’s director of online communications, “With more troops returning home, we also have a responsibility to connect with the thousands of servicemembers who have been — and will be — entering our system. They’re using social media, so that’s where we need to be.” 

For more information on the CDC study, go to: http://www.cdc.gov/pcd/issues/2012/pdf/11_0132.pdf

For more information on the new VA social media launch, go to: http://www.va.gov/opa/pressrel/pressrelease.cfm?id=2238

Peter S. Gaytan is the author of For Service To Your Country – Updated Edition: The Essential Guide to Getting the Veterans’ Benefits You’ve Earned (Citadel, 2011), available from Amazon, Barnes and Noble, and other booksellers. He has served as an advocate in securing and protecting the earned benefits of America’s veterans for more than a decade. Gaytan is the Executive Director of the American Legion, the largest 

veterans service organization in America.

1)  Interest Rates Haven’t Been This Low in nearly Half a Century!

Freddie Mac began collecting mortgage interest data in 1971 to calculate national averages.  Since then, the national average interest rate has never remained as low as it has recently.  Since mid November 2011, interest rates have been hovering at or below 4%.  Economic indications are that the rates should hold for the immediate future, but will eventually go up.

2)   Loan Terms Can BE Cut in half for almost the same payments!

According to a Freddie Mac report, a trend in refinance is 15-year mortgages.  If you obtained a 30-year fixed rate mortgage around 4 years ago, chances are you’re paying around 6% APR.  At today’s average rate of 3.16% for 15-year fixed mortgages, you could pay off your new VA loan in about half the time and save a small fortune in interest payments.  Here’s what the comparison of two $250,000 VA mortgages might look like:

1. 30-year fixed rate of 6% (4 years ago) = $1,499 per month and $289,595 in total interest

2. 15-year fixed rate of 3.16% (today) = $1,746 per month and $64,236 in total interest

3)  Some HOUSES ARE A STEAL IN TODAY’S MARKET

Let’s not beat around the bush — the housing market is depressed. According to an S & P home price index, housing prices have not increased annually since 2006.  Homes are priced as if it were 2003!  Buyers have their pick of an abundance of bank-owned properties, short sales and homes priced to sell.  Because VA borrowers can obtain VA-backed loans with no money down, coming up with enough cash to put down on a home is not an issue.

For more information on VA-guaranteed loans, contact an experienced lender.

It’s no doubt VA loans can save eligible borrowers money.  Military members stand to save the most with these unique VA loan features:

- Zero Down Payment
- No PMI
- Seller-paid Closing Costs
- Interest Rate Advantage
- Streamlines

Because VA home loans are backed by the federal government, the extra security of a down payment is not required.  Let’s compare conventional and VA purchase loans to show just how much a veteran can save.  Each borrower purchases a home for $250,000.  Many conventional lenders recommend 20% down payment – that’s up to $50,000 cash upfront from the conventional borrower vs. $0 from the VA borrower.

Another great benefit of VA loans is no private mortgage insurance (PMI).  This insurance premium is required with FHA and conventional mortgage programs if borrowers bring less than 20% down to the closing table.  To illustrate the savings, let’s compare the same $250,000 house purchase.  Assuming the conventional borrower puts $25,000 down for a 30-year loan of $225,000 at 4%, the estimated mortgage premium is $101. This premium must be paid monthly for 5 ¾ years until 80% loan-to-value is achieved.  That’s a total of $6,868 from the conventional borrower vs. $0 from the VA borrower.

With VA loans, the seller can pay up to 4% of the buyer’s closing costs and concessions. This can include the buyer’s VA funding fee, property tax and insurance prepayments, selling incentives such as appliance packages, interest rate reduction points, and payoffs of judgments and other debts.  Conventional loans only allow for 3% seller-paid closing costs.

In conventional lending someone with a credit score of 650 might qualify but may be considered higher risk than someone with a score of 720.  The borrower with the lower credit score may be given a “high-risk” interest rate.  According to VA guidelines, no minimum credit score is required for qualifying.  VA lenders often set their own minimums, usually lower than that of conventional qualifying. And, VA borrowers typically receive one low interest rate as long as they qualify.  This is known as the interest rate advantage. A veteran with a 4% interest rate on a $250,000 30-year fixed rate loan can save $73 per month and a whopping $26,343 over time vs. a conventional borrower with the same loan at 4.5% interest.

Finally, VA Streamline refinances are a quick and easy way for eligible borrowers to get a lower interest rate on an existing VA loan.  Little or no interest and credit re-qualifying is required.  And, the VA funding fee is just .5% for all Streamline loans.  Many conventional lenders no longer offer Streamline refinancing.

For more ways to save with VA loans, contact a specialized lender.