Podcast
Questions and Answers
Who of the following is probably not eligible for a VA-guaranteed loan?
Who of the following is probably not eligible for a VA-guaranteed loan?
- A National Guard member on active duty
- A veteran with a dishonorable discharge
- A sergeant serving in the reserves
- A soldier 70 days into his first tour of duty (correct)
Which of the following would not be available through the VA loan program?
Which of the following would not be available through the VA loan program?
- Owner-occupied residence loan
- Refinance loan
- An investor loan (correct)
- VA guaranteed loan
Which of the following factors would, without any other compensating factors, allow approval of a VA loan where the borrower's income ratio is too high?
Which of the following factors would, without any other compensating factors, allow approval of a VA loan where the borrower's income ratio is too high?
- Residual income at least 20% over the required minimum (correct)
- Savings account balance
- Good credit history
- Age of the borrower
If a loan amount is between $144,001 and $453,100, what is the maximum guaranty amount?
If a loan amount is between $144,001 and $453,100, what is the maximum guaranty amount?
How is a veteran's full guaranty entitlement restored?
How is a veteran's full guaranty entitlement restored?
What is the residual income of the Evans family with a monthly income of $5,000 and specific obligations?
What is the residual income of the Evans family with a monthly income of $5,000 and specific obligations?
Who originates a VA-guaranteed loan?
Who originates a VA-guaranteed loan?
What is the term for the guaranty amount available to a particular veteran?
What is the term for the guaranty amount available to a particular veteran?
What is the guaranty amount for Tim and Teri, who are both veterans buying a $450,000 house?
What is the guaranty amount for Tim and Teri, who are both veterans buying a $450,000 house?
A VA borrower may use secondary financing to cover a downpayment if:
A VA borrower may use secondary financing to cover a downpayment if:
VA loans are easier to qualify for, compared with conventional or FHA loans.
VA loans are easier to qualify for, compared with conventional or FHA loans.
What is the standard maximum debt to income ratio for a VA borrower?
What is the standard maximum debt to income ratio for a VA borrower?
Who may assume a VA loan?
Who may assume a VA loan?
What is the maximum percentage of sales concessions in a transaction involving a VA loan?
What is the maximum percentage of sales concessions in a transaction involving a VA loan?
What is the funding fee for a veteran borrower who was a member of the regular military and obtains a no-downpayment VA loan for $100,000?
What is the funding fee for a veteran borrower who was a member of the regular military and obtains a no-downpayment VA loan for $100,000?
Which of the following would not be a compensating factor that would help a VA loan applicant who has inadequate income?
Which of the following would not be a compensating factor that would help a VA loan applicant who has inadequate income?
How large a downpayment will a VA borrower need to make if buying a $500,000 home and having a full entitlement of $113,275?
How large a downpayment will a VA borrower need to make if buying a $500,000 home and having a full entitlement of $113,275?
What are the maximum monthly total obligations for the Evans family to qualify for a VA loan?
What are the maximum monthly total obligations for the Evans family to qualify for a VA loan?
The document issued by a VA-approved appraiser which sets forth the value of a property is known as a:
The document issued by a VA-approved appraiser which sets forth the value of a property is known as a:
The borrower will make annual mortgage insurance payments on a VA loan.
The borrower will make annual mortgage insurance payments on a VA loan.
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Study Notes
VA-Guaranteed Loans Overview
- VA-guaranteed loans do not typically support investor loans, focusing on veterans and eligible borrowers.
- An eligible borrower could be denied a VA loan if their income ratio exceeds limits, but residual income exceeding the required minimum by 20% could compensate.
Loan Amounts and Guaranty
- For loan amounts between $144,001 and $453,100, the maximum guaranty is 25% of the loan.
- A veteran's full guaranty entitlement is restored upon selling the property and repaying the loan in full.
Residual Income Calculation
- The Evans family's monthly obligations total $2,130, leading to a residual income of $1,870 from their $5,000 monthly income.
- To qualify for a VA loan, the maximum total obligations cannot exceed $2,050 for the Evans family without compensating factors.
Loan Originators and Entitlements
- VA loans are originated by institutional lenders.
- The term "entitlement" refers to the guaranty amount available to a veteran.
Borrower Scenarios
- Tim and Teri, both veterans, have a maximum guaranty of $113,275, which will apply to their house purchase of $450,000.
- Secondary financing for down payments is permissible if certain conditions regarding income, restrictions, and total financing compared to appraised value are met.
Qualifying Characteristics
- VA loans are generally easier to qualify for compared to conventional or FHA loans.
- The standard maximum debt-to-income ratio for a VA borrower is set at 41%.
Loan Assumption and Sales Concessions
- VA loans can be assumed by any individual who is deemed creditworthy.
- Sales concessions in VA loan transactions cannot exceed 4% of the property’s appraised value.
Funding Fees and Down Payments
- A regular military veteran obtaining a no-downpayment VA loan for $100,000 incurs a funding fee of $2,150.
- A VA borrower purchasing a $500,000 home in a non-high-cost county will need to provide a down payment of $11,725.
Appraisal and Loan Characteristics
- Appraisal documentation for VA loans is provided as a Certificate of Reasonable Value or a Notice of Value.
- VA loans do not require borrowers to make annual mortgage insurance payments, distinguishing them from other loan types.
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