Hello. My husband and I are both eligible for a VA loan.

We've decided to build a home in GA and would like to obtain a VA loan to do so. The company we have talked with would be taking out the construction loan, so we would actually be looking at a regular mortgage loan.

According to all of my calculations, our income of $100,624 annually would put us well within qualifying range for a $205,000 home.

However, we had some problems financially about 6-7 years ago and have been working constantly to fix the problems. We've never filed bankruptcy and never had any reposessions, but we did have collections and my husband had a judgment that is now satisfied. When we were AD, it seemed that as soon as we were becoming more stable financially, we had to move and incurred new costs (deposits, etc), went on deployment, whatever it was and the cycle continued. It is important to note that we have never been evicted and have paid rent on time or earlier consistently for the past 5 years. Now, we're a lot more finally stable (and much wiser). We have been paying things off constantly for a year.

EXTREMELY important to note is that I have a VA overpayment of education benefits of $2000 from 2005 that will be paid off in February 08, because I will be attending school full time again at that time. We have one acct other than this in collections that is $503 which will be paid off this month.

Our current total monthly liability other than utilities, etc is $1325 (paying $110 on the cc, most months more) and our predicted liability in 6-12 months will be $918.91.Right now, we have about $2000 of cc debt remaining (mostly Military Star card, some on a Visa..we have 3 other CC's and a WalMart card that are all paid off) We also have a seemingly never-ending loan (those Pioneer people) that will FINALLY end in October 08. Right now, we are paying pmts of $317 per month on that loan. Other than that, we have a monthly car pmt of $300.91 (paid off in 09), a timeshare pmt of $118 (paid off in 2016), and child support pmt of $500 (payable until 2015). We think that it would be best for us to pay off the remainder of the loan that ends in 12 months, plus pay off the cc debt completely before we apply for a mortgage.

Although our FICO scores are increasing, they still are pretty low (around 600).

Bottom line: What are our chances of getting a VA loan within the next 6-12 months? Would we be able to qualify now or not? How is the interest rate on the VA loans determined? Is is the same across the board or varies, as regular mortgage loans do, based on your credit history? Obviously, we are first time homebuyers and have many questions. Our money is something that is very private to us and we have done everything on our own instead of actually talking to a mortgage professional about our situation. I hope that we can get some advice here before we waste our time with a mortgage officer if we aren't even in the right place yet.

In order for us to sign a contract on our home to be built, we must have a pre-APPROVAL letter in hand (plus, of course earnest money)

We are very anxious to buy a home, but only want to do so when the time is RIGHT. I would rather not have the inquiries if we wouldn't be pretty confident in approval.

PLEASE HELP!

Although my profile says I'm no longer an active member, I am. Just a different screen name. I WILL be checking for replies.

It doesn't sound like you will have any problems getting the VA loan for your permanent financing. You can use your husband's eligibility and not have to worry about the over payment issue. VA loan rates are market based like conventional loans are. How much are you putting down for the construction loan. Most banks have gotten rid of 100% construction loans.

Paul
See my profile for contact information

Paul, Thank you for your reply. We won't actually be taking a construction loan at all. The builder will take on the construction loan and we will ONLY be doing a mortgage loan, buying from the builder.

Although we want to use my husband's entitlement, I would like to use our combined income, which is stated above. My husband makes about $73k, I make about $27k without bonus.

I guess my question should be: What are the "deal breakers" on a VA Loan? What will absolutely be denied for and what will the banks work with? Is it better to use a regional bank that does VA loans or try one of the online places such as "Deleted" etc?

Edited for content-USMCvet

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The vast majority of those websites only sell your information to a bunch of different lenders and you get tons of phone calls from it. Contact a VA approved lender and talk to a loan officer that knows the VA loan guidelines. Your concerns about including both incomes is kind of a moot point. Since you are married both of your incomes will be counted however yours doesn't have to be.

Paul
See my profile for contact information

No kidding about the phone calls! I sent a QUESTION and nothing more to one of the sites and I had FOUR calls at WORK, 5 at home, and my husband had 3 at work! RIDICULOUS!

you should not be over concerned with the VA guarentee- the VA doesn't do loans-

based on your credit score- you will be able to get a loan- but the rates will be in the high 6- to low 8's, with no money down.

but a few options remain- even though the interest rate may be a little high- if you are frugal and plan- you can refi in 2 yrs and go non VA with a better FICO score-

we used VA first- and had a high 8.38%- but we did not have high FICO scores and very little credit- we had the home for 3 yrs and made a 40,000 dollar profit.

this time we did not go VA we went with an NFCU veterans choice loan- 0 down 0 pmi and low funding fee.
our rate is 6.15%

with a VA guarentee it would have been 7.25%--

so shop around a little-

Credit scores don't matter on VA loans. Often times a lender will steer you in the direction they want you to go in order for them to more easily do the loan.

There is a good article by "the Goat" on VA loans at "DELETED". If nothing else, it's a good read.


Edited for content-USMCvet

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LEAD-BASED PAINT HOUSE:

If you are buying a house before 1978, there is a chance there may be lead-base paint in this house therefore you should request a lead-base painting be done prior to your buying a house. The real estate agent tells you that his real estate company will not approve a lead-base investigation because it is so costly to do so and if you do request a lead-base investigation you will have to pay $1,000 for earnest pay instead of $500. Something sounds a little shady to me. What do you think is going on here and should one buy this house at all especially since the real estate agent is not encourging to get one done?

A lead based paint inspection is not something that is normally done. Because of that, it sounds like the sellers may be somewhat freaked out by it and may or may not know what the results will be. From what I understand and someone correct me if I am wrong but I always heard that if there is lead based paint then just painting over it was acceptable as far as safety goes. I have only heard of one case where a little girl died because she was eating chipped off lead based paint.

Paul
See my profile for contact information

quote:

Originally posted by MortgageGuru:
A lead based paint inspection is not something that is normally done. Because of that, it sounds like the sellers may be somewhat freaked out by it and may or may not know what the results will be. From what I understand and someone correct me if I am wrong but I always heard that if there is lead based paint then just painting over it was acceptable as far as safety goes. I have only heard of one case where a little girl died because she was eating chipped off lead based paint.

Paul
See my profile for contact information

Thanks for your response. After setting up an appoint with my real estate agent and before you responded to my question, my real estate agent called me on the day before my appointment that a contract was placed on this home and that contract was being approved at this point.

I guess you were right about the lead base paint inspection because when I first requested this inspection, he told me that it probably would not be approved but I told him I wanted to get it done anyway.

So, how should I handle this situation if I was to find a house built before 1978? The fact that I am not in good health and my daughter is asthmatic causes me to ask for this type of inspection. I know I should be looking at more up to date houses but these old houses look good also.

Can you give me the pros and cons of buuying a bank owned foreclosed home with a VA loan? I know there are a lot of these homes on the market now. I am just wondering if it would be to my advantage to pursue this.

After reading up a bit on lead based paint I think your concerns are more warranted than I ever previously imagined. Check out the link below to a pamplet put out by the EPA.

Protect Your Family from Lead in Your Home

As far as buying foreclosures go with the VA loan, it can be hit or miss. The number one issue is that if there are any repairs needed in order to meet the VA appraisal standards then you get stuck with either making those repairs out of pocket or having to find another house. Lenders only on rare exception will ever make any repairs to a property.

Paul
See my profile for contact information

Thanks for answering both of my questions especially the one about led base paint. Health concerns has always been a priority for me when it comes to my trying to buy a house with my asthmatic child. I truly appreciate the abundance of information you gave me.

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