Finding VA Home Loan Lenders

by Diana K. from Texas, USA

Ask Kate about finding VA Home Loan Lenders in Houston, Texas: Hello there Kate! I am Diana, wife of a veteran husband. Do you know of a good VA lending source that is flexible in forgiving not-so-good credit? We are moving back to Houston, Texas permanently and will be in the market for buying a small home. I wanted so much to have financing in place so that we could buy the home of our choosing within our budget.


Diana continues... Ten or more years ago, my husband and I wanted to build a home on a piece of acreage that we bought in the Houston area. We sort of lost steam trying to buy through the VA, (or any lender for that matter) because the paperwork was long but more so because every time we came up against the credit history, my husband's past would seem to stand in the way.

We have had a rocky past though most of our obligations from the past have been met. We never intended on skirting our responsibilities, causing intentional harm to our credit nor to our creditors. It's just that sometimes bad things happen to good people.

Our current business takes us on travels for work out of state for 8 months out of the year. The economy has effected the profit potential of our income but ultimately the family working relationship and business endeavor that we entered into has started to deteriorate as a result.

As far as current creditors go, we have perfect payment histories and we are sticklers about keeping our credit standing in as good a condition as we possibly can. My credit score is 745 and my husband's is 640, the last we checked. There are a few medical bills that are owed but we do plan on paying those rightfully so.

It is unfortunate that the FTC does not police unscrupulous debt buyers who constantly keep very old debt alive and current through what I believe should be a fraudulent process, keeping people from moving forward in their lives. And although there are criminal-minded people who do indeed make a living defrauding creditors, I am certain there is a clear difference in credit histories which will categorically prove those instances to be separable.

With that said, we would just like to finally be able to use my husband's VA home loan benefits which we have not been able to do all these years. If you have any information that can help, we'd sure appreciate it.

Very warmly, Diana K.

Kate Answers: Finding VA Home Loan Lenders

***zz-portrait-left.shtml*** Dear Diana, Sounds to me like you are determined to buy a house. Congratulations!

First, a couple of facts regarding home loans for Veterans and Active Military Personnel...

1. The 2011 VA home loan limit, without a down payment and outside of high cost areas, is $417,000.

2. Veteran's Administration (VA) does not lend the money but guarantees about 25% of the mortgage to the lender, in the event a homeowner should default on the obligation. The good news is that this VA guarantee substitutes for the traditional down payment required by non-VA home loans.

VA Home Loan Eligibility and Credit Scores

The older a collection gets on a credit report, in general, the less affect it has on credit scores. But that does not mean VA loan guidelines will allow the lender to look the other way.

If you suspect paid collections will be popping up as unpaid debts, I recommend informing your mortgage professional. This gives your lender a head's up in case extra time is needed to verify the debts are paid but just being shuffled along the debt-collector-circuit.

Also ask if it seems likely any unpaid collections will need to be addressed.

Tip: Paper trails to verify paid debts are much easier to create as you go rather than scraping together after the fact when you can't remember the details. Here is one way to create a paper trail to verify you paid off a collection.

VA Home Mortgage Loan Paperwork

You mentioned the extra paperwork with VA loans. Yes, so true and especially burdensome in the case of VA construction loans, as you discovered. I suppose we can assume it is the price to pay for a zero down loan!

Keeping that in mind, start getting your loan ducks (personal paperwork) in line, using my mortgage checklist. I always found as a lender that tidy, upfront, and complete paperwork was especially helpful in overcoming lingering credit obstacles.

Finding and Comparing VA Home Loan Lenders

Finding and comparing VA lenders is similar to shopping for other mortgage companies. I have a tutorial on this and to save time, will direct you to that page. Go here to Compare Mortgage Rates And Lenders In Six Steps.

You can also consult our mortgage directory, List of Mortgage Companies in Texas.

Diana, one more thing. Is this page is helpful to you? I'd like to hear back from you.

You (or anyone else reading this) can comment on Finding VA Home Loan Lenders. Or Ask Kate another question.

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Best wishes,

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Closing my VA Streamline today at 11am
by: Jack from Haverhill MA

NO nightmare on closing today. I closed this morning on a 30 year streamline refi IRRRL at 3.25%, fixed 30 year, LOCKED on 3/1/2013 with a $1891.27 lender credit and $1126 in closing costs.

Less than 3 weeks, not 3 months like before. Same company. Went from 3.75% to 3.25%, had to shell out $292.13 at closing, with breakeven in 6 months.

Hi Jack, Kate here...

So happy to hear of the successful mortgage closing on your VA streamline aka Interest Rate Reduction Refinance Loan (IRRRL)! Enjoy your new affordable house payment!

Best wishes, Kate

VA Hybrid Home Loan
by: Jack from Haverhill, MA

Kate, what is your opinion of the VA hybrid loan compared to the 30 year fixed rate mortgage? At 63 years old, what would you do?

Hi Jack, Kate here! VA hybrid home loans are fixed for a certain time period, 3 to 5 years depending on current guidelines, and can adjust no more than 1% a year after the fixed period ends, but no more than 5% in total.

How are you equipped financially to handle the rate adjustments? Although rates can also go down, I would base my decision on a worst case scenario. If the maximum adjustments fit your budget and don't keep you up at night, it might be a go. But keep in mind HOW low the fixed rates have dropped before making the decision.

You can use my calculator to figure prospective monthly house payments based on rate increases.

Best wishes, Kate

Short Income History for VA Home Loan
by: Anonymous

I have a VA home loan but only one month's worth of good paycheck stubs. My job is sort of like a commission job. I only make as much as I choose to work. I could work four months out of the year and make great money, but I'm being told I need 12 months of stable paycheck stubs to use my VA loan. Is there a company that does not require as many month's worth of pay stubs, that will approve my VA loan?

Hi Kate here. The lender for your Veteran Administration (VA) home loan is requesting a full year's worth of paystubs in order to average your income. This is because you are not paid on salary or for consistent hours.

In addition to income, the lender must verify sufficient job history, current employment, as well as the likelihood of continued employment.

But let's say that one paystub this year verified an entire year's worth of qualifying income. In addition, your last two tax returns show similar wages under the same method of employment. With a good explanation, you might get mortgage approval.

But with one sole paystub, I think you will run into the same issue elsewhere. However you are free to shop other VA approved lenders.

Good luck and best wishes, Kate

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