June 6, 2017
The VA home loan program just can’t be beat for someone
wanting a home loan requiring as little cash at the closing table as possible.
VA loans don’t require a down payment, certain closing costs are restricted and
the veteran isn’t allowed to pay for them and there is no monthly mortgage
insurance payment. When a couple buys a home together only one of the buyers
needs to have their VA eligibility as long as they’re married. If they’re not
married and there is a coborrower on the loan, a VA loan can still be used but
there are a couple of adjustments.
The VA loan program is one of three government-backed loans
and carries with it a guarantee to the lender should the loan ever go into
default at 25% of the loss. That guarantee applies when the veteran is the only
applicant on the loan and is VA eligible or is married and the couple applies
for the VA loan jointly.
But if they’re not married and the coborrower is not VA
eligible, the guarantee is still there it’s just the guarantee drops from 25%
of the loan to 12.5%, or half the original guarantee. In this instance, there
will need to be a down payment of 12.5% to make up for the original guarantee.
This is sometimes referred to as a “joint” VA home loan.
Not all lenders will issue such as loan but mortgage lenders
experienced with the VA home loan program can. It’s just that the issue doesn’t
come up very often and when it does the lender might not realize the marital
status and VA eligibility are major issues. The mortgage company can tell the
buyers they can qualify for a VA loan with no money down but once the loan file
reaches an underwriter, things will change. The loan can still be approved but
only with the lowered guarantee and a down payment of 12.5%.
For more information or questions about mortgage loans, please call (855) 757-8748.