The first step to buying Atlanta real estate with a VA loan is to fill out a VA loan Certificate of Eligibility (COE) from the VA or a VA-certified lender. COEs verify that you may be eligible for the program. It never hurts to contact a VA-loan lender who can guide you through the process and make sure you maximize the benefits of the program.
The VA does charge a minuscule funding fee, but borrowers have the option of rolling the amount into their monthly payment. With smaller monthly payments, VA loan borrowers may be able to prepay on the loan. They can do so knowing they won’t get penalized for prepayments. Having this benefit does not necessarily mean an increase in the interest rate either.
Though it never hurts to have impeccable credit, many VA lenders don’t expect it. The VA does not have a credit requirement, but the lenders look for scores in the 620 range. Higher scores mean more borrower-friendly terms, such as lower interest rates. But it’s OK to apply for a VA loan with less than perfect credit. In addition to the credit leniency, the VA loan program has no income requirement.
Applicants with a history of foreclosure may still be eligible, as might applicants with a bankruptcy in their past. After a chapter 7 bankruptcy, two years after the date of discharge must pass before you may qualify; after chapter 13, just one year after the date of discharge. Lenders need to see full explanations of the bankruptcy, and for chapter 13 applicants must procure proof of payments and written approval to borrower from the court. Nevertheless, there are few mortgage options as flexible as the VA loan program.
To avoid foreclosure, the VA offers a handful of resources to borrowers. Compared to other loan types on the market, VA loans have the lowest foreclosure rate at 2.46 percent, according to the Mortgage Bankers Association. In eight locations across the country, VA loan specialists advise borrowers on the best way to prevent foreclosure.
Options range from a deed-in-lieu, when the borrower deeds the property to the loan collector, to short selling the property. The VA may let borrowers sell the property to pay off the loan, give borrowers more time to pay missed installments or roll missed payments into existing monthly payments. Veterans on the verge of foreclosing on a conventional loan can refinance to a VA loan that could cover 100 percent of the property value.
Another popular perk is the refinancing flexibility of a VA loan. The VA Streamline, or interest rate reduction refinancing loan (IRRRL), lets borrowers restructure their loan from adjustable- to fixed-rate or just lower their interest rate. VA streamlines pack other benefits, such as adding 10 years to the life of the loan.