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VA Loan Requirements for Reservists

va loan requirements for reservists

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VA Loan Requirements for Reservists

VA Loan Requirements for Reservists. VA loan has loads of benefits for veterans or active service members. Unfortunately, there are some from the military that actually did not aware that they are qualified for a VA loan, and those people are mostly from the Reserve and National Guard. 

Generally, reservists and National Guard who have served at least six years of service will be eligible for the VA loan, as long as they did not get dishonorably discharged. But, the government also allows VA loan eligibility in certain circumstances. Now, reserve and National Guard members could gain VA loan eligibility by being called into active duty service and serving 90 days consecutively. If any of these criteria have been met for members of the National Guard or reserve, they may qualify for a VA loan.

Some of the criteria are; they have served six years in selected reserve and were either honorably discharged, retired, or transferred to standby reserve, or even an element of the ready reserve other than the selected reserve, after honorable service. Then, the National Guard or reserve members have served in the selected reserve for more than six years. They also have served in active duty for more than 90 days. Or they were either discharged or released from active duty for a service-related disability.  If either of these criteria have been met by a member of National Guard or reserve, they are able to obtain their Certificate of Eligibility or COE. This COE can be obtained by their mortgage lender as long as they have the proof of service.  VA Loan Requirements for Reservists

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Moreover, now the VA loan eligibility for National Guard just got boosted thanks to Veteran Health Care and Benefits Improvements act in 2020. National Guard members under Title 32 who have served 90 days of full-duty cumulatively, or at least 30 consecutive days can now be eligible for a VA loan. The National Guard Association of United States also estimated around 50.000 Guardsmen mobilized for the COVID-19 pandemic may gain immediate eligibility for a VA loan. Some of a VA loan documents and paperwork for the National Guard and Reserve may vary, but the VA loan process itself is not any different for National Guard and Reserve borrowers. They also have the same access to homebuying benefits and VA loans, just like regular active-duty members and veterans. VA loan borrowers could communicate with VA loan specialists about their eligibility for the VA loan program. Additionally, to start the VA mortgage process, you do not need to have your Certificate of Eligibility in hand or COE, but you have to have it before the loan period comes to closing time. You have to also remember the period of the eligibility, benefits of a VA loan, or any other benefits generally ends if you separate from the military. Eligible members that are separated because of unit deactivation, a disability that was not caused by misconduct, or involuntarily separated may receive a 14-year period of eligibility.  

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Reserve and Guard loaners also are able to include their service income as effective income toward mortgage qualification. Just like with other forms of income, the key is the stability and reliability of an income. Lenders will then look at your history of service and indications of whether it is likely to continue. If the lenders are concerned about stability, lenders at least may be able to use that income to offset short-term obligations. Meaning, service income could basically cancel out other expenses that are expected to last a year or two. They may also inquire about whether your income could change based on your unit being activated.

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Then, you have to remember that all VA borrowers, from veterans, active-duty members, reserve, and National Guard are obligated to pay VA funding fees. Except, if you have a service-connected disability, then this is not a must. VA also pays monthly compensation for disabilities that occurred or aggravated during active duty, or active duty for training for disabilities as a result of injury or disease, or inactive duty training for disabilities due to injury, heart attack, or stroke. Morever, the discharge must be under other than dishonorable conditions. This fee will go directly into the Department of Veteran Affairs and helps keep the program going for future generations of service members and veterans. VA funding fee also helps to ensure that the loan continues without a down payment and monthly private mortgage insurance or PMI. Now, the VA funding fee percentage may vary based on your service, the type of loan, and how many times you have used the program. If this is the first time of purchasing or doing a cash-out refinancing, the funding fee for Guard and Reserve VA loaners is 2.3% of the total loan amount. For every purchase or cash-out refinance after it, the VA funding fee percentage will be increased to 3.6% for all borrowers. It is also possible to finance the VA funding fee into the loan that you currently doing, or you can just ask the seller to pay for it.

So, National Guard and reserve members are not so different from active service members or veterans for getting a VA loan. They also qualified for a VA loan if they have served six years of service. Basically, if you as a National Guard or Reserve member who has not been dishonorably discharged, then you may qualify for a VA loan. You will then have your certificate of eligibility for it, and you need to remember that you may start a VA loan program without COE, but you do have to have it before the loan period comes to an end. You also required to pay VA funding fee, and the percentage of the VA funding fee is 2.3% of the total loan amount. You also need to remember that the percentage of the VA funding fee will be increased to 3.6% if this is the second time for you to purchase using the VA loan program or cash-out refinance.

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