Va Home Loan Questions

[Anonymous]

Hi there. DH and I are trying to buy our first house using the VA loan. We are going through Navy FCU and so far they have been pretty quick with the process. My question is if reserves is needed for a VA loan? Also, what are the approved funding sources for a VA loan? My mom is going to give us the money as a gift for closing costs. Is this acceptable? He has about 5k in his TSP account and we have about $3,000 put away in savings. However, the money in savings is a financial aid refund from school. Is this an approve funding source for the VA loan? If no, how will the UW look at this? I also told LO we have about $1,500 in our checking that is use for bills and other expenses. Thanks in advance for your help.

[gagum129]

I am definitely not a pro but I am currently purchasing a home with a VA loan so I can give you a little insight to what I have been told by my lender. Reserves generally are not required for a VA loan but your particular lender may require some of some sort. You can get some money gifted to help closing and such but if your realtor and lender are any good they may be able to work it to where you have little to no money out of pocket. In my case I am purchasing a $165,000 home and will have to come to closing with only about $250. When we put in the offer to buy the home we asked for $5000 worth of seller concessions. This was enough to cover just about all of my closing cost and with VA loan there is no down payment required.

Hope this helps. I am sure some of the experts will be on later to give you some better feedback.

[BrianB_The_Loan_Professor]

VA does not have a reserve requirement

you can use gifted funds for closing costs but they need to be documented

not sure about the financial aid part?

as shared above Best when putting an offer in to ask the seller to give you a credit for the closing costs - very common in todays market

with VA you can get keys with very little out of pocket 

Good Luck

B

[Anonymous]

Thanks gagum129 and Brian. I just wanted to make sure about these questions I am asking because I do not want to have all of my hopes up and than it not work out . My sister is our realtor and she's pretty good in the business. She said she is going to work towards the seller covering the closing cost. However, our lender just wants to make sure what is our source of funds for closing just in case we have to pay for it out of pocket. She's not really familliar with the VA loan but has done FHA and conventional loans. Also with money in savings, does it have to be seasonal? Like it has to sit there for 3 months or so? Sorry I am just a bit confused on this whole process.

[gagum129]

Again each lender will have their own requirements but in my case I just had to provide last two bank statements.

[Anonymous]

Okay thanks. That's very true that each lender has their own requirements. When we applied with WF they said they will take 2% off of our student loans and include that into the DTI ratio. However, Navy FCU said they do not do that and only does it if the deferrment is less than 12 months.

[Anonymous]

The rule of thumb on VA assets is two months statements. Any large deposits on the statements that are not payroll deposits would need to be documented also.

Good luck and Thanks for serving.

[Anonymous]

Thanks for the reply VAloanguy. I just had another question in regards to student loans. When we spoke to LO the other day he said he will not count that towards our DTI cause DH is due to graduate in two years and me in another 1 1/2 years. We spoke with him again today and for some odd reason he said that he had calculated the student loans into our DTI after telling him we won't be out of school until 2 years for DH and 1 1/2 years for me. We can even provide documentation from the school and lenders if needed for expected graduation date and when loan will go in repayment. So my question is if this is even correct on his end? From my understanding I thought that it shouldn't be counted towards the DTI if it is longer than 12 months.

[Anonymous]

It must be a lender guideline. You are correct on the 12 month date. Here is what the VA handbook says:

If student loan repayments are scheduled to begin within 12 months of the date of VA loan closing, lenders should consider the anticipated monthly obligation in the loan analysis.  If the borrower is able to provide evidence that the debt may be deferred for a period outside that timeframe, the debt need not be considered in the analysis.

[Anonymous]

Okay thank you for that confirmation Valoanguy. I will wait to see what our LO says when he replies back tomorrow or Monday.