Principle Home Mortgage is proud to offer current servicemembers, veterans, and eligible surviving spouses in State College, PA and the Centre County region this advantageous mortgage loan product, a VA home loan. With a certificate of eligibility, those clients who qualify for a VA mortgage can expect competitive rates, no required down payment, and significant seller assist (if negotiated in your sales contract) towards closing costs. A VA home loan is available in forward purchases, refinances, and renovation products and can be a great low cost mortgage loan option.
- Seller Assist: Up to 4%
- Agency: The Department of Veterans Affairs
- Max Loan-to-Value: 100%
- MIP: No monthly insurance premiums
- Max Income: No maximum income limitations
- DTI Requirement: 41% but varies by lending bank, can be much higher with an automated system approval.
- Credit Requirement: No requirement by VA; varies as it is set by the lender
- Down Payment Requirement: As little as 0%
- Funding Fee: Most current and former military will be required to pay a funding fee. It is an upfront cost of the VA home loan and can be financed into the total loan. It is a percent of the loan amount and based upon several factors including military category, down payment, first-time or repeat loan user. A VA funding fee is not required for:
- Those veterans receiving VA compensation for a service-related disability
- Those veterans who would be receiving compensation for a service-related disability if they did not already receive retirement or active-duty pay
- The surviving spouses of veterans who died as a result of service or from a service-related disability
- The VA backs your home loan: Unlike other mortgage products, a VA home loan is guaranteed by the VA. This guarantee is extended to the private lender in the case of foreclosure, allowing the lender to recover most or all of their investment, resulting in less risk to the lender. For the borrower, this can result in a better likelihood of obtaining the loan under better terms than other loan programs.
- No required down payment: VA home loans are one of the few mortgage products that do not require a down payment, unless the subject property’s sales price is higher than the appraised value. Keep in mind there is a difference between down payment and closing costs.
- Typically, terms and interest rates are better: When comparing VA home loans with other loan product types such as conventional or FHA, VA home loans typically have lower interest rates and better terms.
- No MIP or PMI: FHA requires the borrower to pay MIP (monthly insurance premium) for the life of the loan in most cases. Conventional loans require the borrower to pay PMI (private mortgage insurance) if less than 20% is provided as a down payment, and it continues until the loan-to-value reaches 78%, or the borrower actively seeks out to cancel it at 80% loan-to-value. VA home loans do not require any monthly mortgage insurance premiums, thus saving the borrower significant funds each month.
HOW DO I APPLY?
The process of applying for a VA home loan is no different than many other traditional mortgage loans, with the exception of needing a Certificate of Eligibility from the VA. Generally, you will need 2 years tax returns & W2s, 2 months bank statements, 2 forms of ID, and 30 days of paystubs in addition to the COE from the VA. If you are self-employed, these requirements will vary slightly. To determine your eligibility for a VA home loan in State College, PA or the Centre County region, reach out to Principle Home Mortgage at (814) 308-0959 to discuss your home financing needs.