Lee's Summit VA Loans

VA Loan Financing Tips to Consider

You’ve earned your VA loan benefits, and it’s time to use them. With more than 630,000 loans backed under the VA in 2018, your chances of a positive outcome are literally better than ever. Follow these best practices to streamline the process of financing your home through Lee’s Summit VA loans.

Understanding the Purpose of the VA

VA loans are made for traditional residential properties. It is not a program for investors. You are expected to take up a personal residence in the home you purchase within 60 days of closing.

Although lenders have some discretion in terms of housing type, you should expect a tougher road if you are looking to build a customized or manufactured home.

Optimizing Your Credit for the VA

VA benefits provide some of the most flexible, accommodating requirements of any home loan program in the nation. Imagine how much better it would be if your credit score was high as well. You only need a 620, but you can lock in great interest rates if your score is higher. Why lose out on this benefit while you are taking advantage of the others?

By the way, don’t use credit to make any big purchases during this process. Even if you don’t drive your credit utilization ratio above the 30% benchmark, lenders consider this irresponsible. Keep in mind that many parts of the process are automated. Big purchases may raise red flags in a lender’s computer system.

Stabilizing Your Income for the VA

VA lenders love to see borrowers with a steady stream of income. Your debt-to-income ratio (DTI), time on the job and residual income (income after expenses) is arguably the most important metrics the VA considers. As a benchmark, the VA likes to see a max DTI of 41% and a minimum of two years of consistent work. Benchmark residual income varies with location.

Getting Preapproved for a VA Loan

Aside from eligibility, stability, and viability, Lee’s Summit VA Loans also wants to know if you are a serious buyer. The best way to prove this is to go through the preapproval process. The process also gives you a better idea of your own purchasing power, and so keeps you from wasting time touring and considering homes that you cannot afford.

Partner with Lee’s Summit VA Loans

Following the best practices above and partnering with the right lender gives you leverage in the complex process of buying a home. Lee’s Summit VA Loans is a proven financial partner with years of experience turning your hard work into homeownership.

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