What is a Veterans Administration loan?

Veterans Administration (VA) loans are available to qualified veterans, reservists, and active servicemen and women; these loans allow you to secure a mortgage up to a specified amount with no down payment and with flexible qualifying guidelines. The loans typically offer lower interest rates than you would find on any other mortgage. An application, a veteran’s certificate of eligibility, and a VA-assigned appraisal are required.
To obtain a VA loan, the law requires that:
❑ The applicant be an eligible veteran who has available entitlement
❑ The loan be for an eligible purpose (such as the purchase of a primary home)
❑ The veteran occupy or intend to occupy the property as a home within a reasonable period of time after closing the loan
❑ The veteran be a satisfactory credit risk
❑ The income of the veteran and/or spouse be stable and sufficient to
meet the mortgage payments, cover the costs of owning a home, take care of other obligations and expenses, and have enough left over for family support Find out more about VA loans at the VA’s Home Loan Guaranty Web site: www.homeloans.va.gov.

What government resources are available for home buyers?

A number of government-sponsored and -supported organizations offer a plethora of resources, opportunities, and programs for home buyers, particularly first-time buyers and those that fall into very specific categories, like veterans, who have access to Veteran’s Administration mortgage programs. Programs developed by community development departments (at the local level) and the Department of Housing and Community Affairs (at the state level) assist home buyers with flexible lending programs; housing options; and other resources, such as counseling. At the national level, in December 2003 President George W. Bush signed into law the American Dream Downpayment Initiative, which is expected to help more Americans enjoy greater access to more housing opportunities. The legislation will provide an average of $5,000 in grants to approximately 40,000 lower-income families in 2004 and 2005 to help them pay down-payment and closing costs on their first homes. Grants are made to state and local governments through the U.S. Department of Housing and Urban Development’s HOME Investment Partnership program. The program launched in spring 2004 and information about it is available at HUD’s Web site: www.hud.gov.
Through the Fair and Accurate Credit Transactions Act of 2003, the government is also helping individuals with credit-reporting issues. Under this legislation, consumers will receive one free annual credit report; full disclosure of their numerical credit score and the factors influencing that score; notice of any negative impact on their credit score caused by multiple shopping inquiries; notification when negative information is added to their credit files; prompt investigation and correction of inaccurate credit information; and new tools to combat identity theft such as placing a fraud alert in their credit file. The legislation also calls for federal regulators to conduct a study of the effects of consumers’ credit scores and credit-based insurance scores on the availability and affordability of homeowners insurance. The three most popular homebuyer programs offered by or supported by the government are Veterans Administration Loan Program, Fannie Mae’s Community Home Buyer’s Program, and FHA loans.

What information must I give to obtain a mortgage online?

Each online lender has different application requirements. A visit to Lend ingTree.com, one of the Internet’s better known lenders, for example, revealed a checklist of items to bring with you when you’re ready to sign up:
❑ Social Security Number of All Borrowers: Lenders use your social security number to access your credit record, which contains information about your income, debts, and credit payment history.
❑ Current Mailing Address and Number of Years You’ve Lived at This Address: This information will be compared against your credit record to determine if your rent or mortgage payments have been made on time each month.
❑ Property Type of the Home You Are Purchasing: Lenders need to know what type of home you are purchasing because your home becomes the collateral for your mortgage in the event that you default on the loan.
❑ Purchase Price, Down Payment Amount, and Amount You Wish to Finance: This combined information helps lenders determine the type of mortgage that may be best for your needs.
❑ Employment Information: Lenders normally like to see that you have been with the same employer for a few years, or at least in the same line of work, to demonstrate career stability.
❑ Total Monthly Income and Debt Payments: Your income and debt payments illustrate your debt-to-income ratio, which is the amount of money you owe each month compared to the amount of money you make. This ratio helps lenders understand your total financial situation.
❑ Total Liquid Assets: Lenders are interested in the amount and value of any assets you may have to help them judge your ability to make loan payments from available cash.