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VA Purchase & Cash-out Requirements
Must be Primary Residence
Must be a Veteran, Active Duty National Guard, Reservist or Surviving Spouse.
Certificate of Eligibility: Time in Service and Character of Discharge
Home must pass a VA appraisal considering value and VA-specific property requirements
No specific minimum credit score required
2 yrs of employment history
Residual Income
No Mortgage Insurance
No Down Payment
VA Refinance (IRRRL)
Primary, Secondary or Investment Property is OK
Must be a Veteran, Active Duty National Guard, Reservist or Surviving Spouse.
Certificate of Eligibility: Time in Service and Character of Discharge
12 mths of on time mortgage payments
No Income Check
No Mortgage Insurance
No Asset Verification
Interest Rate must drop 1/2%
Eligible 210 days after 1st monthly payment
CONVENTIONAL
LOANS
Requrements
Credit Score: Typically, a credit score of at least 620 is required.
Down Payment: While it's possible to obtain a conventional loan with as little as 3% down, a down payment of 20% or more allows borrowers to avoid paying private mortgage insurance (PMI).
Employment History: Stable employment history, typically two years with the same employer or in the same industry, is often preferred.
Income: Lenders will review your income to ensure you can afford the mortgage payments. Documentation, such as recent pay stubs and tax returns, will be required.
Property: The property being purchased will need to undergo an appraisal to ensure it meets certain conditions and to determine its market value. The loan amount usually cannot exceed the appraised value.
Primary, Secondary or Investments Residence
2 months of Bank Statements
FHA Loan
Requrements
Credit Score: Minimum of 580 for a 3.5% down payment. Scores between 500 and 579 may qualify with a 10% down payment.
Steady Employment: Generally, a 2-year employment history is preferred. This doesn't necessarily mean 2 years with the same employer but rather a consistent work history.
Primary Residence: The property must be the borrower's primary residence.
Property Standards: The home must meet specific minimum property standards and pass an FHA appraisal.
Mortgage Insurance: Borrowers are required to pay an upfront mortgage insurance premium (UFMIP) and an ongoing monthly premium, usually for the life of the loan.
Property Limitations: There are loan limits, which can vary by region, dictating the maximum amount that can be borrowed.
Residency: Borrower must be a legal U.S. resident and have a valid Social Security number.
USDA Loan
Requrements
Eligibility: Only available to U.S. citizens, non-citizen nationals, or qualified aliens.
Property Location: The home must be located in a USDA-designated rural area, which includes many towns and suburbs.
Income Limits: There are household income limits, which vary by region and family size. The USDA typically serves applicants with low-to-moderate incomes.
Credit Score: Generally, a score of 640 or higher is preferred, which allows for streamlined processing. Lower scores might still qualify but will undergo more stringent underwriting.
Repayment Ability: Applicants must show they can afford the mortgage payments, taxes, insurance, and other associated costs. Generally, these payments should not exceed 29% of the monthly gross income.
Debt-to-Income Ratio (DTI): Total debt shouldn't exceed 41% of income, but higher DTIs can be approved with certain compensating factors.
Stable Income: Typically, a stable employment history or a consistent source of income for at least 24 months is preferred.
No Down Payment: One of the significant benefits of the USDA loan is that it offers 100% financing, meaning no down payment is required.
Mortgage Insurance: While there's no down payment, USDA loans require an upfront guarantee fee and a monthly fee, but these are typically lower than those of other government-backed loans.
Property Requirements: The home must be modest in size, design, and cost. It should also be in good condition and meet the USDA's property standards.
Primary Residence: The property must be the borrower's primary residence.
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