If you are active military, a veteran of the United States military, or a veteran's spouse, you may be eligible for a VA loan in Texas. A VA loan is a great way to purchase a home without putting any money down, and there are many different types of VA loans available.
This guide will cover all you need to know about VA loans in Texas. We will discuss everything from what is a VA loan to eligibility requirements and more. So if you are interested in learning more about VA loans in Texas, keep reading!
All About VA Home Loans
As a member of the U.S. military or a veteran, you've likely heard the term "VA home loan" frequently. But that doesn't mean you understand what it entails and how it can benefit you! So, let's first start with the basics. A VA home loan is a mortgage that is backed by the United States Department of Veterans Affairs (VA).
In fact, this program dates all the way back to World War II, when the VA home loan program was created as part of the GI Bill of Rights. However, the program has been expanded and improved upon over the years, especially since the U.S. Dept. of Veterans Affairs became a standalone cabinet-level administration in 1989. The VA loan was designed to offer long-term financing to eligible American service members, veterans, or their surviving spouses.
VA loans are offered through private lenders such as banks, credit unions, and mortgage companies. The VA does not actually lend the money for these loans; they simply back a portion of the loan so that the lender can offer more favorable terms to the borrower.
What is a VA Loan?
A VA home loan is similar to other types of loans. You borrow a certain amount of money for a home based on your income and debt, and you'll be responsible for monthly loan payments to the mortgage company for the life of the loan.
The main difference is that the Department of Veterans Affairs (VA) guarantees a portion of this type of loan so lenders can offer borrowers more favorable terms. This makes it easier for veterans and their families to qualify for a mortgage and purchase a home!
For example, someone applying for a VA loan might get a better interest rate than someone applying for other loan types like a conventional loan or FHA loan. There are also some different rules regarding VA mortgages and down payments.
Eligibility
There are many different factors that go into eligibility for a VA loan. To be eligible, you must be a veteran, service member, or the spouse of a service member who is currently serving or has honorably served in the military.
For National Guard members, the minimum active-duty service requirements depend on when you served.
You must also have a good credit history and meet certain income requirements. Surviving spouses are also eligible, as long as they have not remarried.
VA Loan Requirements
There are certain requirements that you must meet in order to qualify for a VA loan. These include having a good credit history and meeting certain income requirements. You will also need to obtain a Certificate of Eligibility from the VA in order to apply for a VA loan.
Typically, debt to income ratio (DTI) is used to determine how much a borrower will qualify for. However, VA mortgages are primarily assessed using a residual income calculation.
This determines if the eligible veterans have enough income to cover their living expenses after paying the mortgage, other housing expenses such as insurance and utilities, property taxes, and other debts like car payments or credit cards.
What to Know About Getting a VA Loan in Texas
If you are interested in getting a VA loan in Texas, there are some things that you should know! First, Texas offers three types of VA loans: the traditional VA Loan, the Texas Veterans Land Loan, and the VA Construction Loan.
Texas Veterans Home and Land Loans
The Texas Veterans Land Loan is a great way for veterans to purchase land in the state of Texas. In 1983, the Texas Legislature created the VLB Veterans Housing Assistance Program to assist Texas Veterans and Military Members in purchasing a home.
Through this program, eligible Texas Veterans and Military Members have an opportunity to purchase a home with a low-interest loan with little or no money down.
Additionally, the VLB offers the Veterans Land Loan Program - the only one of its kind in the nation. This program gives Texas Veterans and Military Members the opportunity to borrow money to purchase land at highly favorable interest rates and terms. Unlike some VA loans that do away with down payments, this program requires a minimum 5% down payment.
VA Construction Loan
If you are interested in building a new home in Texas, the VA Construction Loan can help you finance the construction of your new home. The 2022 limits for this loan must not exceed $647,200 for most U.S. counties.
Additionally, the property must be located in a VA-approved area and must not exceed VA maximum land limitations, such as 10 acres. Like all VA loan homes and properties, the property must be inspected by a professional approved by the VA.
Determining Your VA Loan Benefits
There are many different benefits that come with a VA loan. These benefits can include no down payment, no private mortgage insurance (PMI), and more favorable interest rates. The best way to determine your eligible benefits is to speak with a VA-approved lender.
Certificate of Eligibility
In order to apply for a VA loan, you will need to obtain a Certificate of Eligibility from the VA. This certificate is available through the VA, and you can apply for it online or by mail.
A Certificate of Eligibility (COE) is provided by the U.S. Department of Veterans Affairs and will inform your VA loan lender that you meet the necessary eligibility requirements to obtain a VA loan.
Working with an Experienced VA Loan Lender
When you are ready to apply for a VA loan, working with an experienced VA loan lender is important. A VA-approved lender will be able to help you determine your eligibility and guide you through the application process.
It also helps to work with a local lender in Texas since you may be interested in a VBL loan. At Texas United Mortgage, we are experienced lenders who work with active service members and veterans to obtain the best home loans for their needs. We want to get you into your dream home!
VA Approved Lender
You can visit the Department of Veterans Affairs website to find a list of VA-approved lenders. If you're already working with a real estate professional, you can also ask them for recommendations.
Questions to Ask Mortgage Lenders
When you are shopping around for a mortgage lender, there are some important questions that you should ask. These questions will help you determine if a particular lender is right for you and your needs.
Most lenders have certain fees when they close VA loans. Make sure to ask about fees, competitive interest rates, and the lender's experience with VA financing.
Getting Started
If you are interested in getting a VA loan, the first step is to contact a VA-approved lender. A VA-approved lender can help you determine your eligibility and guide you through the application process.
Once you have been approved for a VA loan, you will be able to start shopping for your new home! Thanks for reading! We hope this Quick Guide to VA Loans in Texas is a helpful post you can refer back to on your home-buying journey.
