VA Loans-Scottsdale, AZ

To be eligible for a VA loan, one of the following statements must be true.

• You have done 181 days of active service during peacetime

• You have done 90 consecutive days of active service during the war

• You have served more than six years as a National Guard or Reserves

• You are an active spouse of a service member who died in the line of duty or due to a disability connected to the service.

Veterans, active-duty service members, and surviving spouses that have these qualifications can obtain VA loans.

A certificate of eligibility proves that a buyer meets the requirements for VA loans. There are several ways to acquire this certificate, including applying online through the VA eBenefits portal or applying through a VA-approved lender. You can still go through the VA loan process as your certificate is processed.

A VA loan can only be used for the purchase price of a primary residence. For example, the VA home loan cannot go toward a vacation home or investment property. Additionally, the VA will review the home to ensure it is a reasonable value for the amount of the loan. Keep in mind the median sale price for a Scottsdale home is currently $820,000. The buyer must then occupy the home within 60 days of loan approval. It is possible to purchase multi-unit homes with VA loans as long as one of the units is occupied by the buyer.

While the requirements are much more relaxed to be eligible for a VA loan, lenders are still going to hesitate to approve this loan type if a borrower is considered financially risky.

Credit Score

Though there is no credit score requirement to acquire a VA home loan, many lenders will still recommend a score of 580+ to be approved for VA loans. A better score will also yield a more negotiable interest rate.

Debt-to-income ratio

DTI compares the amount of monthly debt to the amount of monthly income that you have. While there is no requirement for a specific DTI threshold, your mortgage lender may want to see a ratio no higher than 41% to approve your VA mortgage.

Proof of Income

A mortgage lender will want to see proof of income before approving your VA mortgage. You will need to provide proof of employment for the last two years, or proof of ongoing employment for the next two years. Additionally, the VA has income requirements that recommend how much cash should be on-hand after living expenses and debt payments to cover VA loans.

While total closing costs may be reduced for VA loans, and the lack of a down payment certainly helps, there will still be some closing costs to cover when the transaction is completed. The VA funding fee in particular, is one cost that may be a surprise, which is required for all VA loans with a few exceptions. Other fees may be paid for lenders, attorneys, real estate agents, loan creation, local governments, title searches, and other transactional services used to close deals involving VA home loans.