VA Purchase Loan

Qualifying for a VA home loan should be relatively straightforward as long as you meet the basic VA loan requirements. Reach out to a member of our team who can help you review your eligibility for a VA loan, whether you’re interested in a purchase loan, a cash-out refinance, or a VA streamline refinance loan.

If you qualify for the full VA entitlement, there is no limit on VA loans, which means that you should be able to borrow as much as you want and the VA will guarantee up to 25% of the loan amount. 

However, your loan application and amount still needs to be approved by your lender. During the underwriting process, your lender will assess your income, financial history, credit score, existing debts, and assets to determine how much you qualify for.

As long as you have full entitlement, you can use a VA purchase loan as many times as you want. If you do not qualify for full entitlement, you may be able to restore your entitlement by selling your home to pay off your loan, using the one-time restoration of entitlement, allowing another qualifying veteran to assume your VA loan, or by refinancing your existing loan. 

Some of the primary drawbacks of VA loans include:

• Must meet VA loan requirements: VA loans aren’t available to everyone. In order to use a VA loan, you must meet minimum service requirements and obtain your Certificate of Eligibility (COE).
• VA funding fee: Virtually all borrowers must pay the VA funding fee when using any type of VA loan. The VA funding fee helps support the VA loan program. Note that some individuals — such as those who have a service-related disability — are exempt from paying the VA funding fee.
• Cannot be used for investment properties: VA home loans can only be used to purchase primary residences, so you won’t be able to use this type of financing to purchase an investment property or vacation home. However, you can buy a mult-unit property with a VA loan and live in one unit while renting out the others. 
• Properties must meet VA standards: In order to finance a home using a VA loan, the house must meet the VA’s minimum property requirements (MPRs). These requirements are in place to ensure the home buyer purchases a home that’s safe and sanitary, so they serve a good purpose. However, they can also limit the amount of homes you can consider and, in some cases, can prevent you from purchasing a fixer-upper.

VA mortgage rates tend to be low when compared with other types of mortgages. This is because VA loans are backed by the government, and therefore lenders have the ability to offer better rates and terms.

As far as specific VA loan rates are concerned, these will depend on a variety of factors. A borrower’s credit score, income level, DTI ratio, and assets can all have an impact on the rate they qualify for. Market conditions will also play a major role in dictating current VA loan rates.

See the VA loan rate table above to get an idea of what current rates look like. Once you fill out an application, we can provide you with the VA mortgage rate you qualify for and lock it in.

VA loan applications can get denied for a variety of reasons. Some common reasons VA loans might get denied include:

• Failure to meet minimum requirements: If you don’t meet the VA’s minimum service requirements, you won’t be able to qualify for a VA loan. Not sure whether you meet VA and lender requirements for a VA loan? Reach out to one of our mortgage specialists to review your eligibility.
• Application errors: A VA loan application can get denied due to application errors or a lack of required paperwork. Remember to double-check your loan application before submitting and reach out to Griffin Funding if you have any questions while filling out your application.
• Lack of income: VA loans require borrowers to provide proof of income during the application process. If you lack a consistent income or aren’t employed, it’s possible that your application could get denied. If you’re searching for self-employed mortgage options, make sure to check out the non-QM loans that we offer.

There is not a specific loan limit that you can borrow on a VA purchase loan. Prior to 2020, there were limits on how much of a given loan the VA would insure. Traditionally, the amount the VA would guarantee was compliant with the limits set by the Federal Housing Finance Agency, which was known as the conforming loan limit.  

However, as of 2020, there are no longer VA home loan limits (unless you have more than one active VA loan), making the dream of homeownership open to more veterans and service members than ever before—as long as they meet the VA loan requirements. 

Our free VA loan calculator can help you understand what you can afford and what your mortgage payment will be.

You may have to pay some closing costs. While you do not pay a down payment or monthly mortgage insurance with a VA home loan, you may be responsible for other closing costs, including:

• The VA funding fee: The VA funding fee is based on the type of home loan you receive as well as the total amount of your loan. You will pay the one-time fee at closing.
• Loan origination fee: The loan origination fee is associated with the creation of the account and loan processing. The VA allows lenders to charge a maximum flat origination fee of 1% of the loan amount, which covers costs like underwriting and loan processing. 
• VA appraisal fee: The VA appraisal fee is charged for the assessment of the property’s value and condition.
• State and local taxes: State and local property taxes are typically required when you purchase a home.
• Recording fee: The recording fee is charged for the real estate documents that must be recorded by the county.

A VA purchase loan can be used to:

• Buy a home: You can purchase a single-family home or condo in a VA-approved project, manufactured home, or lot.
• Build a home: You can build a home from the ground up using a VA loan. However, some lenders will place restrictions on property types. When a VA loan is used to build a home, it’s often referred to as a VA construction loan.
• Improve your home: You can make upgrades like energy efficient features, necessary renovations, and more. When a VA loan is used to improve a home, it’s often referred to as a VA purchase renovation loan.

With a VA purchase loan, you can achieve virtually any of your homeownership needs and goals—you can even use a VA loan for a mobile home.