by Desiree Lowe | Mar 1, 2024 | Home Loans, Homebuyers, VA
The men and women who have served in America’s Armed Forces have sacrificed so much to protect our freedom and communities, including time away from their families. There’s no profession more deserving of having a home to call their own. Supreme Lending is honored to provide opportunities to help Veterans and active military personnel achieve their dreams of homeownership through affordable mortgage options, including VA loans that can offer 100% financing. Let’s dive into the benefits and eligibility of VA loan programs.
Guaranteed by the U.S. Department of Veterans Affairs, VA loans are designed to help those who have served in the military and their eligible surviving spouses obtain homeownership with more flexible and favorable terms.
VA Loan Benefits
Two of the biggest benefits of VA loans are the no down payment or mortgage insurance premium requirements—making homeownership more accessible for those who may not qualify for a traditional loan. Other unique VA loan benefits and features include:
- Lower origination fees, appraisal fees, and closing costs.
- Purchase and refinance for primary homes.
- No prepayment penalties.
- Fixed- and adjustable-rate loan options available.
- Variety of eligible property types (single-family, townhomes, VA-approved condos, etc.).
- Available for qualified first-time and repeat homebuyers.
- 580 minimum credit score; 620 minimum credit score for loan amounts more than $ 766,550.
- At least 41% Debt-to-Income (DTI) ratio.
- VA non-allowable fees can be paid by seller, up to 4% of the loan amount.
- Two year waiting period after foreclosure or bankruptcy after discharged.
- Some states may offer additional options for extra affordability.
VA Loan Eligibility
A requirement of VA loans is that the homeowner lives in the home as their primary residence. A valid Certificate of Eligibility (COE) must be presented at the time of application, which includes military eligibility such as length of service or service commitment, duty status, and character of service.
VA Funding Fee
While there is no down payment requirement, VA loans do require a one-time funding fee to cover administrative or processing costs. The fee is 2.15% for first-time use of the program with zero down payment, still much lower than a traditional down payment! Additionally, the funding fee decreases to 1.5% with 5% or more down payment and to 1.25% with more than 10% down payment.
VA Loan Refinancing
Veterans Affairs also offers options for refinancing. A VA streamline refinance, also known as an Interest Rate Reduction Refinance Loan (IRRRL), could be a great option for military homeowners looking to potentially reduce their interest rate and monthly payments of a current VA loan. A VA cash-out refinance allows borrowers to leverage the equity they’ve built in their home and could help homeowners fund renovations or other large expenses.
For more information on VA loans and other mortgage options, reach out to your local Supreme Lending Loan Officer or contact us today.
by Desiree Lowe | Feb 20, 2024 | FHA, Home Loans, Homebuyers
When it comes to buying a home, which could be one of the biggest investments you make, it’s important to understand your financing options. While a Conventional loan is more traditional, FHA loans have seen a rise in popularity due to more flexible guidelines. Let’s dive into a few of the FHA loan benefits and features for homebuyers to consider when choosing a mortgage.
What is an FHA loan?
The Federal Housing Administration (FHA) knows the tremendous value homeownership can bring to people’s lives and communities, which is why it was founded in 1934 to boost home sales and the economy. The government organization offers special mortgage insurance to lenders as an option to help more people who may not qualify for a Conventional or other type of home loan, qualify through an FHA loan.
When applying for a home loan, an FHA loan may be a practical option, especially if you:
- Are a first-time homebuyer.
- Have a lower credit score.
- Want a lower down payment.
- Are refinancing a high-cost mortgage.
FHA loan benefits and features include:
- Low down payment requirements with a minimum of 3.5%. Mortgage insurance is required.
- Credit scores as low as 580 may be accepted.
- Gift funds can be used for 100% of the down payment or closing costs.
- Fixed-rate and adjustable-rate mortgage options are available.
- Flexible qualification guidelines.
Now you might be asking, what properties are eligible for FHA loans? In addition to single family homes, FHA loans could also finance other qualified properties, such as 2- to 4-unit complexes and condos. Properties with an FHA loan will require an FHA appraisal to ensure the living space is safe and meets proper standards.
FHA loans could be a great option as a steppingstone into homeownership. Could these FHA loan benefits match your mortgage needs?
If you’re ready to see if an FHA loan or other home loan program is right for you, Supreme Lending is ready to help. Contact us to get started today!
by Desiree Lowe | Feb 12, 2024 | Family, FHA, Home Loans, Homebuyers
For aspiring homeowners and first-time buyers, many questions can arise about the mortgage process. What credit score do you need to qualify? How much down payment is required? Answers are based on several factors including the property, purchase price, and, most importantly, the mortgage type.
Here’s a breakdown to simplify the numbers and help you understand what you need to open the door to your dream home depending on common mortgage types:
What Is a Credit Score?
Commonly determined by FICO® score, credit scores are calculated using the borrower’s financial background information such as payment history, credit utilization, length of credit history, types of credit in use, and recent credit behavior. The average credit score in the United States in 2023 was 715, according to Experian data.
Down Payment Assistance Options
If a homebuyer doesn’t have the required minimum down payment or would like to access more financing, Supreme Lending offers several down payment assistance options for qualified buyers. This can also help first-time buyers open the door to homeownership. Guidelines and eligibility vary depending on the program. For example, the Supreme Dream program offers down payment assistance in the form of a fully forgivable second loan and requires a minimum credit score of 620. Ask your Supreme Lending Loan Officer about qualified assistance programs.
Understanding credit score and down payment requirements for different types of mortgages is crucial for prospective homebuyers. While each loan type has its own guidelines, maintaining a good credit score and having sufficient funds for upfront costs at closing remains a common denominator for securing favorable terms and interest rates. By proactively managing your credit and staying informed about your options, you can navigate the mortgage process with confidence on your journey to homeownership.
Contact your local Supreme Lending branch to get pre-qualified and learn about your home financing options.
