Who Qualifies for a VA Loan
VA loans are very easy to secure if you fulfill the eligibility criteria. To be eligible, you must have served 181 consecutive days during peacetime or at least 90 consecutive days during wartime. Reservists also qualify as long as they have served for six years but the time doesn’t have to have been consecutive. Widows of deceased veterans or prisoners of war can also qualify as long as they have not remarried, or the person has been MIA for at least 90 days. Special disability rates are also available for those who qualify. You also must have a VA Certificate of Eligibility in order to qualify.

How Much Can I Borrow with a VA Loan
The lender ultimately decides on the amount that they will lend. Lenders typically include banks, savings and loans, and mortgage companies. Many times, lenders will loan up to 4 times the entitlement without requiring a down payment from the borrower. Basic entitlement for a VA loan is $36,000, but quite often goes up to $60,000. Although there is no limit to the amount that can be borrowed, lenders will often not approve a loan for more than $359,000. To qualify for a loan, the first step is to apply for a Certificate of Eligibility (complete Form 26-1880). Call (800) 827-1000 for more information about VA programs.

VA Loan and Credit Qualifications

Since your VA loan eligibility depends on your debt ratio, it is wise to start thinking about fixing your credit long before actually applying for a VA loan. You can take steps on your own to increase your eligibility for a VA home loan. Eliminate as much credit card debt as possible. If you can get yourself down to a single card and stay that way for six months, you will be well on your way to improving your debt ratio and your credit rating. Remember that the maximum debt ratio allowed for approval is 41%. If you are within a few months of paying off a major debt such as an automobile loan, do so as quickly as possible. You’ll most likely need to allow for credit reporting agencies to “catch up” with your newly paid off cards and loans.

Personal military loans are available at reasonable interest rates if you know your facts. VA Loans are a great way for retired military men and women to get their needs met.

GENERAL RULES FOR ELIGIBILITY You are eligible for VA home loan veteran benefits if you served on active duty in the Army, Navy, Air Force, Marine Corps, or Coast Guard and were discharged under conditions other than dishonorable after either:

* 90 days or more, any part of which occurred during wartime, OR
* 181 continuous days or more (peacetime)

TWO YEAR REQUIREMENT If you:
* enlisted (and service began) after September 7, 1980, OR
* were an officer and service began after October 16, 1981 You must have completed either:
* 24 continuous months or more, OR
* the full period for which ordered to active duty, but not less than 90 days (any part during wartime) or 181 continuous days (peacetime)

YOU ALSO MAY BE ELIGIBLE IF YOU: were discharged for a service-connected disability, or
* were discharged for the convenience of the government after completing at least 20 months of a 2-year enlistment, or
* completed not less than 90 days (any part during wartime) or 181 continuous days (peacetime), and
* were discharged because of a hardship, or were determined to have a service-connected compensable disability, or
* were discharged or released from active duty for a medical condition which pre-existed service and has not been determined to be service- connected, or
* received an involuntary discharge or release from active duty for the convenience of the Government as a result of a reduction in force, or
* were discharged or released from active duty for a physical or mental condition not characterized as a disability and not the result of misconduct but which did interfere with your performance of duty
* are an unremarried spouse of a veteran who died while in service or from a service connected disability, or
* are a spouse of a serviceperson missing in action or a prisoner of war.

ACTIVE DUTY SERVICE PERSONNEL

If you are now on active duty, you are eligible after having served on continuous active status for at least 90 days. When an ending date is established for Persian Gulf War service, a minimum of 181 days of continuous active duty will be required for persons who did not have wartime service.

MEMBERS OF THE SELECTIVE RESERVE

“Selected Reserve” means the Selected Reserve of the Ready Reserve of any of the Reserve components which consists of units and individuals who participate actively in paid training periods and serve on paid active duty for training each year. This includes Army Reserve, Navy Reserve, Air Force Reserve, Marine Corps Reserve, and coast guard reserve as well as Army National Guard and Air National Guard.

ELIGIBILITY MAY ALSO BE ESTABLISHED FOR:

certain United States citizens who served in the armed forces of a government allied with the United States in World War II.
* individuals with service as members in certain organizations, such as Public Health Service officers, cadets/midshipmen at service academies, officers of National Oceanic and Atmospheric Administration, merchant seamen with WWII service, and others.

Cecilia Sherrard

Realty One / Cleveland Ohio

Cecilia Sherrard is a full time dedicated Realtor in Northeast Ohio. With years of experience and knowledge, she has maintained a multi-million dollar producer status. Servicing areas such as: Westlake, Lakewood, North Olmsted, Rocky River, Cleveland, Brook Park, Parma, etc. Visit her website at http://www.youshouldown.com

Residual Entitlement – You can obtain more than one VA loan if you still have money left from your entitlement and it’s sufficient in allowing you to purchase another home. For first-time VA loan takers, an entitlement represents the amount of money that the government is willing to guarantee in behalf of the VA loan taker.

The maximum value of entitlement that a veteran can hope of receiving is around $36,000 although it’s possible that the applying VA loan taker can get more than that depending on the total amount of their loan and the appraisal of the property. Most lenders will loan you up to 4 times the amount of your entitlement for a maximum loan of $417,000.

* Loans amounting to less than $45,000 – Individuals who have obtained loans within this range can expect 50% entitlement from the government
* Loans amounting from $45,001 to $56,250 – Individuals who have obtained loans within this range can expect approximately 40 to 50% entitlement from the government
* Loans amounting from $56,251 to $144,000 – Individuals who have obtained loans within this range can expect approximately 40% entitlement from the government
* Loans amounting over $144,000 – Individuals who have obtained loans within this range can expect approximately 25% entitlement from the government

Substitution of Entitlement (SOE) – If you don’t have any entitlement left, you can try finding another eligible military individual willing to assume your responsibilities for your current VA loan.

In this case, the military individual who’s about to assume your loan must first prove that they have adequate entitlement left to cover the balance of your VA loan. The assuming military individual must also be willing to certify that they will be using the house you’re selling as their permanent residence. If they are willing and able to comply with these requirements, both of you can now file for substitution of entitlement.

Once your request has been granted, you can then apply to the necessary authorities for the restoration of your entitlement. Once restored, you can then apply for your second VA loan.

Selling of Property – To qualify for a subsequent VA loan, you can sell the property that you’ve purchased using the money obtained from your VA loan. After selling the property, you must then settle your remaining obligation with the VA department. Only when your original VA loan has been repaid in full are you allowed to take another VA loan.

Even if you’ve already sold the property to someone else, this doesn’t mean that the new owner of the house is now liable for payment of your VA loan. Until your obligations haven’t been fully settled, your current VA loan will continue to stand and you won’t be able to take a subsequent VA loan.

Restoration of Entitlement – The U.S. Department of Veteran Affairs will award their VA loan holders a chance to have their entitlement restored once and only once as long as the VA loan they had originally borrowed had been paid in full and secondly, that the house they had purchased using their previous VA loan had not been sold off.

Release of Liability – When you sell off a property, depending on your agreement with your buyer, you may still be held liable for your present VA loan. As such, you may have to wait for a certain period of time until you can fully pay off your previous loan and take a subsequent one.

On the other hand, you can always have someone take over your responsibility for you. Depending on the date you’ve been awarded with the VA loan, you may not even have to contact the VA department to inform them of your intentions of transferring your responsibilities to another individual.

For those who have obtained a VA loan after March 1, 1988, however, they will first have to prove that the person assuming payments of their original loan are qualified according to VA guidelines before their entitlement can be restored and they can apply for another VA loan.

In most cases, an individual must make do with simply one VA loan. If you have the chance to take a subsequent VA loan, be sure that you use this opportunity wisely.

John G. Edwards is a consultant that has helped many people with their finances. If you are considering getting a loan, a mortgage, refinancing, or interested in VA loan information you should checkout the articles at http://www.VA-Mortgage.us

The basic rule on release of liability and assumption of VA Loans

Say you’ve applied for a VA loan and have been approved. You’ve got yourself a home, but after a certain period of time, regardless of the reasons you have for doing so, you wish to wash your hands off the property.

Your first option is, of course, to sell the property. This however will not waive your liabilities. You will still be held fully accountable for paying your VA loans on time, even if the property is already owned by someone else.

There is, however, a second option: you can always have someone else assume your loan. To do so, you must approach the necessary government department and request for a release of liability for your VA loan. If your request has been approved, all your responsibilities as the original VA loan borrower will be immediately transferred to the person assuming your loan.

If, for instance, the person who had assumed your loan has been unable to make the required payments on time and the property ends up foreclosed or going into default, you will not be held liable for what happened.

Three ways for VA Loans to be assumed

A VA loan can be assumed in three ways, depending primarily on when you have obtained the VA Loan.

VA Loans borrowed before March 1, 1988

Military individuals who have been able to obtain VA loans before March 1, 1988 are quite lucky because their loans can be freely and instantly assumed by any other person and even those haven’t served in the military in any capacity. They can have other people assume their responsibilities without even having to report their decision to the government.

To make things official, however, the VA loan taker must contact the necessary government department and request for an information packet. This packet contains a set of information brochures that will help the buyer and seller of the home acquired through a VA loan their new set of responsibilities. It will also include the necessary forms that they’ll have to submit to the U.S. Department of Veteran Affairs in order for the original VA loan taker’s Release of Liability (ROL) to become official.

Once the forms have been accomplished and duly submitted, the government will then review the forms and make a decision afterwards.

VA Loans borrowed after March 1, 1988

VA loans obtained by the military individual after March 1, 1988 are NOT freely assumable. In other words, the original VA loan taker must inform the necessary authorities about their intentions and gain prior approval before they can succeed to the next steps.

The person in authority will then provide a set of instructions for the military individual to follow in order for his request of Release of Liability to be processed.

If the person assuming the loan qualifies based on VA standards, he or the original VA loan taker will have to pay a processing fee, costs of credit reports and appraisals, as well as a funding fee.

Unrestricted transfers of VA Loans

If the original VA loan taker dies, the heir/s will have to contact the necessary authorities to make transfer of ownership official. If the original VA loan taker is obtaining a divorce, he or the spouse may also submit a request for Release of Liability if they so wish.

A VA loan is more like a privilege, and it’s a privilege that not everybody is entitled to. If you’re lucky enough to be eligible for a VA loan, do your best not to waste this golden opportunity.

John G. Edwards is a consultant that has helped many people with their finances. If you are considering getting a loan, a mortgage, refinancing, or interested in VA loan information you should checkout the articles at http://www.VA-Mortgage.us

It’s important to note first that the VA is not an actual loan but a loan guaranty process. The Veteran Administration does not act as a lender but guarantees the repayment of the loan thus reducing the risk implied in the transaction for the lender that in turn can provide lower interest rates and more advantageous terms for military veteran applicants.

Eligibility Requirements For VA Loans

There is an automated certificate of eligibility that can provide you with all you need to obtain the VA Loan. However, the database that generates these certificates is not always up to date nor does it contain information on every single applicant. Therefore, you may need to fill a form known as request for certificate of eligibility which once processed will be answered with the certificate you need to apply for a VA Loan. All this needs to be done either at the regional eligibility center that corresponds to your area or through mail. In the last case, you can obtain the forms along with instructions online.

Entitlement For VA Loans

Getting in touch with a credit counselor to guide you through the ways of improving your credit is a good idea if you think that your credit won’t allow you to qualify for the loan. Also, the income is an important issue. The guaranty will apply only if your income and finances let you afford the monthly payments on your loan. Otherwise, you won’t qualify for the guaranty and thus, you won’t get approved for the VA loan. That being said, planning ahead and putting your finances in order prior to applying is definitely the way to go.

Advantages Of VA Guaranteed Loans

One of the advantages that you obtain with VA guaranteed loans is that you won’t be forced to put money down in order to purchase a property. No down payments are required if you can get approved for a VA guaranteed loan. Moreover, veterans can obtain refinancing instead of a home loan with a promotional reduced rate also. Finally, since there is an additional guarantee for the lender provided by the VA, there is no need to charge private mortgage insurance and you can avoid paying it.

Uses Of VA Loans

Though Veteran Administration loans are usually used for purchasing a new home, they can also be used for other purposes. Regulations are not that rigid on this particular issue. You can use the money (if you qualify for a home loan for a higher amount than what you need) to purchase a home and make some major improvements also, as if part of the loan was a home improvement loan based on equity.

—

Jessica Peterson writes for Yourloanservices.com where she shares her knowledge about how to get money for a starting-up business, consolidating any kind of debt, repairing a home even with a bad credit history and more.

VA home loans are available to veterans, reservists, active service members, and members of the Public Health Service. In 1982, Congress passed a law that requires a veteran borrower to pay a one-time funding fee on a VA home loan. The funding fee can be included in the amount of the loan. Veterans who obtain VA mortgage loans are very often first-time homebuyers. VA home loan refinance can assist a veteran to lower his home payment or to take cash out for home repairs or upgrades to the home.

VA loans are available to former or active members of the United States Armed Forces who meet the specific requirements for the length and time of service. There are also specific criteria for discharge conditions. For example, Reservists and members of the National Guard may be eligible if they served at least six years and had an honorable discharge.

If a veteran is discharged due to a service-related injury or disability, then they are potentially eligible. This is true for some members of the Public Health Service. United States citizens, who served in the Armed Forces of a country that was allied with the United States during World War II, may also qualify for a VA home loan.

A VA loan is a terrific option for a veteran home buyer. With a VA loan, less than great credit is not always a problem. If a veteran claimed bankruptcy in the past, but the bankruptcy has been discharged for two years, he or she may be eligible for a VA loan.

For more information on VA Loans please see the guide to VA Home Loans as well as VA Home Loan Refinance.

When people join the military, they sign up knowing that they may be risking their lives in doing so. Indeed, they become targets of our enemies and can be put into harms-way sometimes with little or no pre-warning. Offering decent VA Loans with good terms is the least we can do.

Now then, let us also consider loans for small businesses, which have a much higher fall-out or default rate. Some people criticize these loans too, but realize that the small business people taking this risk also employ people in their businesses, which helps all of us too and our economy, which is kind of like paying it forward on our way to prosperity. Of course, the veteran has already paid it forward by giving service and protecting this nation, so we can enjoy the future prosperity for generations to come, so, think of it that way, okay?

“Lance Winslow” - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; http://www.WorldThinkTank.net/. Lance Winslow’s Bio