Does The Divorcing Non
There are too many variables to give a definitive answer to this question-much depends on the original loan agreement, state community property laws where applicable, whether the non-military spouse has a financial stake in the home or is obligated on the note, and much more.
The simplest way to remember how VA loans work for non-military members is that VA loan entitlement, the ability to use or re-use VA loan benefits, and the ability to purchase or refinance a home using VA loan benefits is tied specifically to the military member.
The non-military members options are limited to what is permitted by law or in the legally binding loan contract.
Veterans and non-military spouses alike should consider legal counsel with experience in military divorce cases when dealing with issues like VA home loans, ownership of the property, and final disposition of the loan. Moving forward without the benefit of legal counsel may be to the petitioners detriment.
Selected Reserves Or National Guard
You must have completed 90 days of Title 10 or Title 32 active service. For Title 32 service to count, at least 30 of active service must have been consecutive.
Or you need to have completed a total of 6 years in the Selected Reserves or National Guard and:
- Were discharged with an honorable discharge, or
- Were placed on the retired list, or
- Were transferred to the Standby Reserve or an element of the Ready Reserve other than the Selected Reserve after service characterized as honorable service, or
- Continue to serve in the Selected Reserves
If you’ve completed less than 6 years of service, you may be eligible if discharged for a service-connected disability.
You may also be determined eligible if you:
- Are an unremarried spouse of a veteran who died while in service or from a service connected disability, or
- Are a spouse of a service member missing in action or a prisoner of war
Note: If you are a surviving spouse, you may also be eligible for VA loan benefits. Read the article VA Loan Eligibility Expands for Surviving Spouses for more details.
Individuals with service as members in certain organizations, such as Public Health Service officers, cadets at the United States Military, Air Force, or Coast Guard Academy, midshipmen at the United States Naval Academy, officers of National Oceanic & Atmospheric Administration, merchant seaman with WW II service, and others may also be eligible.
Related VA Loan Eligibility Articles:
Apply For The Va Loan
The next step is to obtain the COE once certain you are eligible. Either your lender can obtain the loan, or you can apply independently through the mail or at a regional office.
While applying through the lender is quite convenient, we strongly recommend you also apply independently. This will allow you to compare quotes and select the best deal.
Also Check: Sears Military Discount On Appliances
Section : Military Spouse Credit Considerations
Every borrower on the loan must meet the lenders minimum credit score for VA loans. Those benchmarks can vary by lender and other factors.
A veteran with outstanding credit cant somehow compensate for a spouse whose score is below the lenders cutoff, and the reverse holds true, too. Both borrowers either meet the requirement or they dont. At Veterans United, prospective buyers who dont meet our current benchmark can work for free with our credit experts on a plan to boost their scores into qualifying range.
Lenders will quote interest rates based on credit scores. When there are multiple borrowers on a loan, lenders will base their rate quote on the lowest score.
Guidelines and policies for these types of derogatory credit can vary by lender.
Getting a good handle on your credit is key before starting the VA loan process. Use a credit monitoring service or get free copies of your reports from AnnualCreditReport.com. Look for errors, credits accounts that arent yours, and other issues that might be hurting your score.
Your Home Must Qualify For Va Loan
This is one of the harder aspects of VA loan restrictions to explain. Before you can purchase your home using VA loans, your property must qualify. The VA will send a specially appointed VA appraiser to assess the house. Here is a good breakdown of the VA property requirements but in general, your home must be a conventional home in good working condition.
Don’t Miss: Does Petco Have Military Discount
What Are The Benefits Of A Surviving Spouse Va Home Loan
As an eligible applicant for VA loans, you will be eligible for the following VA benefits:
- Obtain a loan without making a downpayment or purchasing Private Mortgage Insurance
- Qualify for lower interest rates
- No prepayment penalties
- Your loan will be backed by the US Department of Veterans Affairs
You might also qualify for additional benefits as a surviving spouse. These include:
- No requirement to pay the VA funding fee
- Potential eligibility for a VA streamlined refinancing loan
- You can refinance 100% of the appraised value
Va Loans: Can I Still Buy A Home While On Deployment
You dont have to put off your dream of owning a house until returning from overseas as a military service member. While its not the most common scenario, its completely possible to use your VA loan while youre on deployment. This could happen if you find yourself starting the homebuying process shortly before a deployment, or if circumstances change within your family while you are away.
With that being said, buying a home when youre thousands of miles away is a little more complicated than a regular home purchase. But dont worry to help you navigate the process, weve put together this guide on using your VA loan on deployment.
Read Also: Does Cox Offer A Military Discount
Understand Occupancy Requirement Extensions And Exceptions
Usually, VA loans require you to move into your house within 60 days of closing. If youre deployed, however, you can receive an extension of up to 12 months. This allows you to buy a home while youre deployed overseas and move in once you return to the United States.
On the other hand, if youre married, you may not need to get an extension. You can meet the occupancy requirements of your loan by having your spouse move into the home while youre away.
Can Existing Va Borrowers Lower Their Interest Rates By Refinancing A Va Loan
On top of that, its also possible to reduce your interest rate by refinancing a VA loan through the interest rate reduction refinance loan . This loan requires you to use additional VA financing to replace your current loan and comes with an upfront VA funding fee of 0.50% of the loan amount.
In the end, the VA loan program can be a big help to those who have sacrificed their country and want to achieve the dream of homeownership.
Also Check: Joining The Military At 30
Other Uses For A Va Loan
While a VA loan is often used to purchase a home, it can also be used to construct a home. Its also possible to use VA financing for a cash-out refinance or in conjunction with the Native American Direct Loan program. Finally, you can also use your VA loan benefits with adapted housing grants. This can be a big help if youre struggling with homeownership.
Website Of The Charity Organization
Anyone can co-sign or co-borrow on your VA loan, depending on the lenders policies, but the VA may not guarantee the entire loan. While the VA guidelines may allow a non-spouse, non-veteran to co-sign for a mortgage, they will not fully guarantee the loan.
Recommended Reading: Does Cox Offer Military Discount
How To Apply For A Coe
The application process varies depending on whether youre receiving Dependency and Indemnity Compensation or not.
- If youre receiving DIC benefits, fill out a Request for Determination of Loan Guaranty EligibilityUnmarried Surviving Spouses . You will also need the veterans DD214 or other separation papers. Submit the VA form and discharge/separation papers to your lender or the VA regional loan center that serves your state.
- If youre not receiving DIC benefits, fill out an Application for DIC, Survivors Pension and/or Accrued Benefits . Youll also need the veterans DD214 or other separation papers, a copy of your marriage license, and the veterans death certificate. Submit the VA form and other documents to the VA pension management center that serves your state.
When The Spouse Has A Low Credit Score
Nearly all mortgage programs adhere to a credit score rule in which the lower of both spouses FICO scores is used for qualification. The lower score is called the representative credit score.
For example, in the following case, 689 would be the representative credit score.
- Eligible veterans credit scores: 678, 689, 719
- Spouses credit scores: 709, 722, 734
The eligible veterans middle score is used for qualification purposes since it is the lower of the two middle scores on the application.
However, its a fortunate fact of VA home loans that there is no minimum credit score requirement. The VAs guidelines state that applicants credit history can be considered satisfactory if they have paid their accounts on time and not incurred major derogatory credit in the last 12 months.
That being said, most lenders set a minimum score for VA lending between 550 and 620. If your spouses credit score is too low for lenders, you have the option of applying for a mortgage in your name only, as long as you are the eligible veteran.
Your spouses credit score and debts wont be counted on the application, as long as you dont live in a community property state. But if you do, the rules are as follows in the following section.
Also Check: Sears Hometown Coupons
Buying Amidst A Military Transfer
Transfers are a way of life in the military, and they can derail the home buying process if one spouse gives up a job to move.
This wife or husband who follows the transferred individual is called a trailing spouse. Mortgage guidelines specifically address trailing spouse income within written guidelines. Lenders count income in one of two cases.
- The employer confirms that moving will not affect income
- The spouse secures employment at the new location
In the second scenario, the company must verify employment via a letter describing the job title, start date and salary. The new job can only be counted if the spouse has at least a twoyear history in that line of work.
Still, these rules can make the difference when VA loan applicants plan to buy a home in the military members new location.
Why You Can Trust Bankrate
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. Weve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.
Bankrate follows a strict editorial policy, so you can trust that were putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.
Our mortgage reporters and editors focus on the points consumers care about most the latest rates, the best lenders, navigating the homebuying process, refinancing your mortgage and more so you can feel confident when you make decisions as a homebuyer and a homeowner.
Va Loan Down Payment Requirements
Under most circumstances, VA loans dont require a minimum down payment. However, if the purchase price of the home is greater than its appraised value, you may have to make up at least a portion of the difference.
And if you are subject to VA loan limits and the home price exceeds the county loan limit, then a down payment will be required.
If youre buying in a competitive market where buyers outnumber home sellers, you may need a down payment just to get your foot in the door. A bidding situation will require a deposit for the seller, and as a portion of your down payment, it shows you are a serious buyer.
An advantage of putting some money down is it will likely reduce the VA funding fee.
Things To Know About Eligibility
IS YOUR FAMILY ELIGIBLE FOR A VA LOAN?
Remember, spouses of vets and active military personnel can handle the application paperwork in part or entirely on behalf of the family. But how do you determine eligibility?
Some general eligibility rules:
- Veterans are eligible if theyve served on active duty for 90 days during wartime or at least 181 consecutive days during peacetime.
- If the entitled borrower enlisted and began service after September 7, 1980, they need to have served for at least two years.
- If the entitled borrower was an officer, they had to have begun service after October 16, 1981.
- If the entitled borrower is affiliated with the National Guards or is a reservist, theres also a six-year service requirement.
WHAT IF MY MILITARY SPOUSE IS DECEASED?
Surviving spouses of prisoners of war or service members who went missing in action may also be eligible if they have not gotten remarried. Also eligible are surviving spouses of veterans who died on active duty or from service-related causes. Additionally, VA Loans are available to surviving spouses who remarried only after turning 57 on or after December 16, 2003. Find all current eligibility requirements here.
TYPES OF VA LOANS OFFERED
Purchasing A Home
Refinancing A Home
Don’t Miss: Sears Hometown Stores Coupon
What Spouses Of Service Members Should Know About Va Loans
However, many service members have questions about including their civilian spouses in the process of getting their VA loan. Here are the top three things that all spouses and service members should know about VA loan benefits.
Qualifying IncomeMore often than not, youll find that with most military couples, one partner is a service member while the other is a civilian. Sometimes, these couples assume that the civilians income or financial standing could be a problem or not count toward qualifying for a VA loan. That couldnt be further from the truth. In fact, the civilian spouses income could actually help! If the civilians income is substantial, it could potentially help the service member qualify for a larger loan.
The Department of Veterans Affairs allows spouses to cosign for loans. In this case, you could use the civilian spouses income with the military spouses eligibility for the VA loan. However, its important to remember that the VA loan is no different from any other loan when it comes to your debt-to-income ratio and credit history. If your civilian spouse makes more but has a poor credit rating, that could hurt your chances of qualifying for a loan, regardless of your military standing.
Who Is Eligible For A Coe
As a surviving military spouse, you may be able to get a COE if you have not remarried and:
- Your spouse died performing military service or from a service-related disability.
- Your spouse was missing in action or a prisoner of war for at least 90 days.
- Your spouse was totally disabled and eligible for disability benefits at the time of death.
Exceptions and nuances apply to these rules, so contact the VA or a VA mortgage lender for more information.
You May Like: Can You Join The Military With High Functioning Autism
How Do Va Loans Work
The VA doesnt make loans, so borrowers must find a private lender that is part of the VA loan program and willing to offer affordable financing.
Different lenders have different qualifying criteria. But the VA encourages lenders to make VA loans available to all qualified veterans that apply. The government guarantees a portion of the loan to pave the way to easier approval. In most of the U.S., the government guarantees loans of up to $510,400 as of 2020 the guarantee means that if you dont pay, lenders are unlikely to lose money.
But that government guarantee doesnt protect you, the borrower, if you dont pay your mortgage. You can still lose your home to foreclosure if you dont repay your loan. If you do run into trouble as a VA mortgage holder, theres a dedicated VA staff to help.
Va Loan Entitlement Options For Military Couples
Eligible spouses can decide to use all of one spouses entitlement for a VA loan, split their entitlement evenly for a VA home loan, or have one spouse use remaining entitlement from a previous VA home loan with the other spouse providing the rest for the new mortgage. Entitlement is basically the dollar amount the VA pledges to repay if the borrower defaults. On most loans above $144,000, the entitlement utilized is a quarter of the purchase price.
You can read our earlier post to learn more about VA loan entitlement in general. Now’s the time to get started on your VA home loan start today.
You May Like: Does Cox Offer Military Discounts
Section : Will You Be On The Loan
This key question sets the path for military spouses. Many veterans and service members want or need their spouses income in order to maximize their homebuying budget.
When it comes to how much you can borrow, lenders can count income only from people on the loan. But being on the loan also means military spouses must meet lender and VA guidelines for credit, debts, income and more. Well take a closer look at some of those considerations shortly.
The bottom line is spouses with credit or debt issues might have to stay off the loan, which can limit the veteran borrowers purchasing power. Veterans with sufficient income can also opt to be the sole borrower. In either scenario, the military spouse becomes whats known as a non-purchasing spouse.
In most cases, lenders wont consider the credit score or financial information of a non-purchasing spouse. But there are nine states where this isnt always the case — Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. These are the countrys nine community property states, where lenders can consider a non-purchasing spouses credit and debts.
Moving forward, well focus on military spouses planning to be co-borrowers on a VA loan.