For those that are VA home loan eligible, buying and financing a home with little or no money down couldn’t be easier. Many times however, the veteran is married and the spouse will be on the mortgage as well but not have any VA home loan eligibility. Can the veteran add a spouse to the mortgage if the spouse isn’t VA eligible? Sure. Married couples with VA eligibility often have just one of the individuals on the application either a veteran or active duty personnel.
The coborrower in this instance will qualify just like with any other loan type. The spouse must live in the property as the primary residence and qualify based upon income and credit. The VA loan guarantee will apply based upon the amount of entitlement the VA eligible borrower has. When a spouse goes on a VA loan application the spouse must also have a qualifying credit score. VA lenders ask for a credit score for both borrowers from all three credit repositories of Transunion, Equifax and Experian. The lender will then use the lower of the two middle scores for qualifying. If the co-borrowing spouse’s credit score is damaged the lender might decide to deny the application. In such an instance the spouse could be taken off the application and the veteran qualify based upon the combined monthly debt of both. Lenders can take the spouse off the application but still consider existing credit card debt and automobile payments of the spouse removed.
If both borrowers have VA loan eligibility spouses can combine their entitlement they can combine their eligibility to finance a home with a VA loan. For instance, one borrower has never purchased a home but the other spouse has but does have some remaining entitlement. Or, both can split their entitlement to buy a home and save their remaining entitlement for a future purchase and keep the existing home as a rental.
VA guidelines also address surviving spouses of qualified VA borrowers. For surviving spouses of deceased military members or otherwise VA eligible, the spouse can be eligible for a zero down VA loan if the veteran died of a service related in injury or was declared totally disabled for at least 10 years prior to the death, five years from the discharge date or one year prior to the death of a POW. Obtaining a VA loan in this manner does require a bit more on-hands assistance from a VA approved lender but this program is an excellent way not to just buy a home but to provide continued assistance for the surviving spouses of those who served our great country.