Are VA Loan Gift Funds Allowed?

va loan gift fundsVA loans have cemented their position as one of the most valuable loan products in the market. The loan product offers a lot of amazing benefits to eligible veterans. These include, in addition to others: zero down payments and no cap on seller’s contribution to the closing costs. Now, when it comes to closing costs it is not really that easy to find a seller. A seller should be ready to pay the costs and all such costs have to be taken care of before the loan is sanctioned. Apart from under certain special circumstances. But, there is an easy solution out of this. And that solution is VA Loan Gift Funds.

What Are Gift Funds?

Gift funds are very simple to understand. They work exactly like a gift does. Your friends or family give you a certain amount of money without any conditions. VA loan Gift funds allow the money to be used for covering the closing costs towards a VA loan. However, there is a set of restrictions that the applicants need to adhere to. These conditions are generally easy for the loan applicants to fulfill. And are, of course, much less stringent than a regular home loan any given day.

Applicants cannot just show up with a pile of cash and call them gift funds for a VA loan. If they get such a gift fund, then they must be able to prove that it came from a legitimate source. Such a source can include family members or even family-like relations, where even friends may qualify. Even if the gift funds are coming from a known person, they should also have a legitimate paper trail. This means these funds should have records with an established financial institution or a bank.

Who is the Source of the Gift Fund?

Another important thing to keep in mind is that no person who is involved in this entire transaction process, in any way, can act as a source of the gift fund. So, someone like a lender cannot become a sponsor of VA loan gift funds. To make sure that this condition is met, the applicant needs to produce a letter with the gift fund. This letter will include all the important details of the donor. It will also include the amount of gift funds, and the date of transfer of these funds to the recipient. This letter also carries an important disclaimer that clearly states that the donor of the gift fund. This donor, in no way, is expecting a repayment of the funds they have gifted.

VA Loan Gift Funds

In the case of VA loans, there are a lot of provisions that make it easier for the applicants to get the loan. The same goes for gift funds as well. Unlike other loan products, a loan applicant is not required to provide a copy of the “gifter’s” bank statement to the lender or to the VA authorities. All they need to do is to present a cancelled cheque, which is considered ample proof of documentation for a VA loan.

Gift Funds can most definitely be used to fund a VA loan and as it turns out it is easier to get a gift fund with a VA loan than with a regular loan.



Can I Apply for a VA Loan Online?

va loan online

VA loan online application is one of the best ways to acquire a home. These loans (VA Loans) are written with extremely favorable terms and make it very easy for veterans to get into the homes that they deserve. Even better, the loan application process can usually be completed entirely online – yes, you can apply for a VA Loan online.

There are many lenders available that offer VA loans. To be able to apply for a VA loan online, you may want to focus on banks that you are familiar. These banks should have federal credit unions that you’ve done business with before. Also national online lenders who will compete to give you the best rates on your mortgage loan.

When you apply for loans, your credit report will only be hit once. It is in your best interest to apply for as many loans as possible within a short amount of time; this will give you the most favorable terms. In practice, applying for a VA loan online is generally as easy as filling out an online form with each lender. There are also third-party aggregate services that will take your information and send them to dozens of lenders at a time.

How Should You Prepare for Your VA Loan?

Before you start applying for your VA Loan online, you should pull your credit report from one of the three major reporting bureaus: Equifax, Experian, or TransUnion. Look over your credit report for any errors and correct them before you apply; your credit score has quite a lot to do with how lenders see you.

As far as technology goes, you should have digital copies of all your documentation (discussed below). You also should be able to digitally fax documents if needed, as many lenders operate only with fax machines.

What Do You Need to Apply for a VA Loan Online?

  • Proof of your service. To apply for a VA home loan, you will need to have either: 

    (1) served for 80 consecutive days of active service during wartime

    (2) has served 181 days of active service during peace time

    (3) served 6 years or more in the National Guard or Reserves

    (4) or been a spouse of a service member whose death was a result of their service.

  • Documentation of your current income.To determine the amount of your income, you current income is considered. This income should be documented thoroughly over the past year. In case you have pay stubs, the last three to six months of pay stubs should be sufficient. If your income is irregular, you will need to document it more thoroughly and have a history of deposits.
  • The last three years of your tax returns. Often, your last three years of tax returns may be requested. This is to identify the amount of money that you have made on an annual basis over the last three years. Don’t worry if you weren’t making as much money back then; the lenders generally just want to see that you’ve been employed.

Once you have all your documentation and information ready, you can begin the process. Generally, this will begin with a simple form through which the lender will pre-qualify you based on your credit score. After that, the lender will ask for a packet with the above information, to give them a more specific idea of your borrowing capabilities.




What is an Adjustable Rate Mortgage? Should You Consider It?

adjustable rate mortgage

Adjustable Rate Mortgage

Adjustable Rate Mortgage can be introduced in a short essay. But the professional should be consulted when making a decision as to its value. 

Buying a home can be an experience that rivals some of life’s biggest moments. It also means making choices and decisions that determine financial and emotional wellbeing. Making those decisions necessitates learning. It is a little of what it’s all about and where to go when you need to learn more! 

A mortgage becomes not only the tool that allows ownership. But a trap that may spring if not treated with intelligence. It is wise to take small steps and be assured that there are those who do know answers. These people are waiting to be consulted. 

What is an Adjustable Rate Mortgage?

The Adjustable Rate Mortgage gets its name from a mortgage with the rate of interest adjusted periodically. Its counterpart is the Fixed-Rate Mortgage which keeps the same interest rate for the entire length of the loan. The interest rate is made up of two parts. The index rate of averages in the financial world. The margin which is the extra that the loan company adds. These two factors make up the interest rate on the mortgage, both fixed and adjustable.

More Information About ARM

What happens with the ARM is that a lower interest is offered at the beginning of the mortgage, and after a number of years, it is adjusted and the mortgage payment will go up to cover the new interest. For example, the 3 referred to in a 3/1 ARM means that the low beginning interest will go for 3 years. Then, a new interest will be determined. After this 3-year period, the rate will be adjusted one (1) time each year until the end of the mortgage. This change will probably bring a higher payment each year. A 5/1 ARM is one that is first adjusted on the fifth year and then once every year until the end.

Types of Adjustable Rate Mortgage

Another kind of ARM keeps the initial payment down by eliminating any principal payment on the amount borrowed. There is sometimes a cap put on the amount of the new payment or on the new interest, or on the amount due and, if this happens, the payments due will be put back in the initial mortgage amount due. It is necessary that an increased source of income be available to pay for an increased mortgage payment through the years of this mortgage. Some ARMs may be transferred to Fixed Rate Mortgages at specific times. There is a fee for this and for early payoff.

Who should take advantage of the ARM with its low numbers at the beginning?

Since the interest rates are lower at the beginning, the homeowner who is planning on only a short time with the mortgage will benefit the most. Someone who is looking for additional cash at the beginning of the home ownership process but knows that he will have a definite increase in cash flow to meet the need later on will find the ARM helpful.

What Are The Benefits of A U.S. Veteran

U.S. VeteranGood news for U.S. veteran! Once your time in the military is done, many veterans hope to provide a home for their families. Rising costs of housing and other compounding factors could make one feel overwhelmed. It could also make one feel helpless when it comes to securing funding for a home. Fortunately, there are some financial provisions for veterans. For the many brave citizens who risk their lives for the sake of the nation, there is a VA loan available. This allows them to make their dream of purchasing a home a reality.


Who Are Authorize to Give VA Loans To U.S. Veteran?

The first step after deciding on a home is identifying the institutions that are authorized to give VA Home Loans. Usually, these establishments are private lenders either banks or certain mortgage companies. The lender will take a U.S. veteran through pre-counseling. This provides a preview of what it takes to get a home under a VA Loan. The conversations could include identifying the key players in making a home purchase as well as debt management.

A down payment is not required when beginning the process of laying down roots and acquiring a home. However, in case the homeowner defaults on payments, the guaranty covers for a veteran’s financial difficulties. This ensures that the lender does not incur any losses. The benefit of a guaranty to a U.S. veteran is it could fast track the rate of your loan financed. However, it is crucial to recognize that a guaranty provides no assurance that one will secure the loan.


Advantages of VA Loans

The VA Home Loan is advantageous since there are no monthly insurance premiums like other loans. This means that one’s pocket is not weighed down by monthly premiums that are an added cost when getting a traditional home loan. Loan interest rates are also flexible and negotiable. In addition to this, a VA Home Loan requires a property appraisal before purchase. The valuation ensures the amount quoted for the home matches the actual worth of the home. An appraisal can save veterans lots of house trouble. To a novice, this stage of a home purchase may seem troublesome, but it is an important aspect of the process to acquiring a place to call home.

VA Loan Requirements

When looking at real estate options, it is important to remember how much money you can secure in your loan. Usually, most veterans can get a VA Loan up to four times their entitlement. To get a VA loan, it is vital that one gets a Certificate of Eligibility (COE). The process includes making an application for a COE by submitting a completed VA Form 26-1880 Request for a Certificate of Eligibility and proof of military service. To get the mandatory certificate faster, approach a lender who might have access to the system. This can quicken processing a VA Home Loan.

When finally approved, a loan-closing meeting is arranged in the presence of an attorney to explain the loan terms, loan requirements and also lay out the plan. The VA Home Loan is a great means by which an eligible veteran can secure a home.


Is It Time to Refinance Your VA Loan Mortgage?

VA Loan Mortgage

Now is the right time for military veterans and service members to consider to refinancing VA Loan Mortgage.

Right now, interest rates on VA loans are at the lowest point we’ve seen in quite a while. If you’re an active service member or veteran, a VA refinance loan may be just what you need. Perhaps to to save money or pay off some old debt, or upgrade your home inside and out.


Find out what you need to know about loan guarantees. Determine when it’s time for you to get a VA refinance. And know what types of loans the VA has for refinancing. Be sure to know the benefits that VA loans offer to service members and their families.

VA Loan Mortgage Guaranty

The VA is not a lender, but a provider of home loan guarantees. Where VA loan mortgage are offered by private lenders, mortgage companies, and banks, the VA guarantees a specified portion of your loan. The VA loan guaranty makes it easier for you to qualify and helps lenders to make home loans available to military service members.

Consider a VA Refinance if you:

  • Want a lower rate and payment on existing VA loan mortgage
  • Need to tap home equity for home improvements or upgrades, college expenses, or to consolidate a 2nd mortgage, home equity loans and other debts
  • Have an adjustable rate mortgage and want a fixed rate and payment
  • Have a non-VA mortgage loan but qualify under VA guidelines

VA Streamline Refinance (Interest Rate Reduction Refinance Loan, IRRRL)

IRRRL or streamline refinance is the simplest way to lower your current interest rate and monthly mortgage payment. It’s called streamline because no credit check is required, little out-of-pocket costs and the time from qualification to closing is relatively short because you don’t need an appraisal or certificate of eligibility, COE.

VA Cash-Out Refinance

With a VA Cash-Out Refinance loan, you can get cash in hand based on the equity in your home. Or, you can refinance any FHA, USDA or conventional mortgage into a new VA loan. You’ll still need a COE, appraisal and standard credit check and underwriting. But with the current lower rates on VA loans, now is a great time to switch to a VA loan.


7 Benefits of VA Refinance Loans

  1. Borrow up to 100% of your home’s value.
  2. Funding fees are included in your loan.
  3. Mortgage insurance is not required.
  4. National Guard members, reservists, veterans and active duty military personnel all qualify.
  5. Spouses of military persons with service-related disabilities can apply.
  6. Surviving spouses of service members who died while on active duty also qualify.
  7. Both fixed and adjustable rate mortgages are available.

Refinance VA Loan Mortgage Today

Work with a VA mortgage originator who will locate the best lender for you and help you through the qualification and closing process. If you need a VA Streamline Refinance, your originator will get you prequalified and help determine the value and equity in your home. If you need a VA Cash-Out Refinance, your originator can help you obtain your COE and prepare you for the appraisal, credit and underwriting process. Work with a VA mortgage originator who will locate the best lender for you and help you through the qualification and closing process. Contact a local mortgage originator who specializes in VA loans today.