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  • VA Loans-Scottsdale, AZ

    The real estate market in Scottsdale, Arizona, is brimming with opportunities for prospective homebuyers, though it is one of the more expensive markets in the state, with a median home sale price 96% higher than the national average. Moving to this beautiful city in the Southwest could make your homeownership dreams come true.

    If you are a veteran, active-duty service member, or surviving spouse, then you may be eligible for a VA loan that can make your dream home more affordable.

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  • Benefits of VA Loans

    VA home loans are insured by the Department of Veterans Affairs. This allows an approved lender to give out VA loans with looser requirements because the Department of Veterans Affairs has incurred more of the risk. There are many benefits to applying for a VA home loan if you are an eligible buyer.

    No Down Payment

    Perhaps the most attractive benefit of a VA home loan is the waived down payment requirement. Though you can opt to pay a down payment to reduce the total cost of the mortgage loan, it is not a necessity. Most other loan programs have down payment requirements, so eligible buyers should certainly take advantage of this perk.

    No Private Mortgage Insurance

    For conventional loans, buyers must pay a 20% down payment to avoid paying for mortgage insurance. VA loans, however, have no insurance payment required. Since the Department of Veterans Affairs insures VA home loans, private lenders do not need insurance to cover them if the borrower defaults. Avoiding these insurance premiums means lower monthly payments compared to other loans.

    Low Interest Rates

    Interest is the money that you pay to borrow the loan. It is in addition to the loan amount. The lower the interest rate on your VA home loan, the less you will have to pay over the life of the loan. The Department of Veterans Affairs makes it easier for private lenders to offer more competitive interest rates to eligible buyers. Accessing a rate below the 30-year fixed average of 7.15% in Scottsdale should be incentive enough to consider this type of loan. There are many benefits not on this list that you can also enjoy with VA loans, including no prepayment penalties on the home loan.

    The best rates come with the best deal.

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    How to Qualify for a VA Loan

    Just because you have served in a military branch like the National Guard or Army does not mean that you will automatically receive a VA home loan. Several factors will affect your eligibility.
    • Military Status

      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.

    • Certificate of Eligibility

      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.

    • Property Status

      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.

    • Financial Status

      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.

    • Closing Costs

      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.

    District Lending Makes it Easy

    Free Quote, No Credit Check
    Keeping the buyer informed throughout the process is a priority at District Lending. To this end, service members, veterans, and surviving spouses can request a free quote for VA loans to get a sense of their options. While homes in Scottsdale often stay on the market for about 52 days, the sooner you get started with your loan application, the better.
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    Mortgage Calculator
    A home loan comes with many costs, whether it is a VA loan or not. Trying to calculate the payment structure for VA home loans can be challenging unless you have access to our mortgage calculator. Play with the variables to find a reasonable value for the type of home loan you can afford.
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    Ask Questions
    Unsure how to get your certificate of eligibility? Want to know about other home loan programs offered at District Lending or the Home in 5 Advantage program in Maricopa County for payment assistance? Reach out to us today with your questions about VA loans and everything to do with financing a home purchase.
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