VA Loans Frequently Asked Questions

Here are answers to the VA loan questions we hear most at Lendia. If yours isn’t here, call us at 949-333-4636.

What can a VA loan be used for?

At Lendia, we offer VA loans to buy a primary home or to refinance your current mortgage, VA or not. You can buy a single-family home, a townhome, a condo in a VA-approved project, or a 2-4 unit property you will live in.

What are the advantages of a VA loan?

• Purchase: no down payment for eligible borrowers, no monthly mortgage insurance, no prepayment penalty, and flexible credit and income guidelines.
• IRRRL (Streamline): no appraisal, no income documents and no asset documents, to lower your rate or move from an adjustable rate to a fixed rate.
• Cash-out refinance: take cash out of your equity, up to 100% of your home’s value, subject to pricing adjustments and approval.

How do VA rates compare to other loans?

VA rates are often lower than conventional rates because the VA guarantees part of the loan. Rates are set by the market, not by the VA.

How large a VA loan can I qualify for?

It depends on your income, residual income, credit, debts and entitlement. With full entitlement, the VA sets no loan limit. If you have reduced entitlement, the county loan limit applies. A Licensed Lendia CA Loan Officer can tell you what you qualify for.

What credit score do I need?

At Lendia, we can go as low as a 580 credit score on VA purchase loans up to $1,000,000. Larger loans need higher scores, typically 680 to 720 depending on the loan amount, and the very largest loans may require full entitlement. Pricing adjustments may apply.

Do I have to live in the home?

Yes. On a purchase, you certify that you will occupy the home as your primary residence, typically within 60 days of closing.

Can I finance my closing costs?

On a purchase, closing costs generally can’t be added to the loan, but the VA funding fee can. Sellers can pay your closing costs, and Lendia offers lender credit programs. On a refinance, required closing costs can be added to the new loan.

What if I have credit problems?

We review your full credit history before pre-approval. Many past issues can still work:

• Foreclosure: 2 years after the foreclosure, or 1 to 2 years with documented extenuating circumstances.
• Short sale: usually no waiting period if your mortgage payments were on time before the short sale.
• Chapter 7 bankruptcy: 2 years from discharge, or 1 to 2 years with documented extenuating circumstances.
• Chapter 13 bankruptcy: 12 months of on-time plan payments and court approval to take on the new loan.

Can you use the credit report I pulled online?

No. At Lendia, we pull our own report and scores. We still recommend you know your scores before you apply.

Should I stay with my Lendia pre-approval?

Yes. Lendia issues your loan and funds it. Shop your options early, then limit credit checks elsewhere, since each one can affect your score and a new pre-approval means starting the process again.

What is the VA funding fee, and do I have to pay it?

It is a one-time fee that helps fund the VA program. Veterans who receive VA disability compensation, and some surviving spouses, are exempt. See the funding fee chart.

Can the funding fee be added to my loan?

Yes, the funding fee can be added to your loan amount.

Why is the APR higher than my interest rate?

The APR is the yearly cost of your loan. It includes interest, origination fees, discount points and other costs, so it is usually higher than your note rate. It is a good tool for comparing offers.

How large can a VA IRRRL be?

At Lendia, we offer VA IRRRLs up to $2,000,000, with a minimum credit score of 700 above $1,000,000. The maximum loan is the sum of your existing VA loan balance, late charges, allowable fees and charges (including up to two discount points) and the VA funding fee.

Can I change who is on the loan with a Streamline refinance?

Usually the same people who are on the original loan must be on the new one, and the veteran must still own the home. If the borrowers change, Lendia may require credit qualification. This table is a guide.

Can I use a Streamline refinance on a rental property?

Yes. You must certify that you previously lived in the home as your primary residence. It does not have to be your residence now. At Lendia, we can go as low as a 580 credit score on this loan.

Can I get a VA loan if I modified my VA loan?

Yes, if the modification only changed the terms or payment and your payments have been on time for the past 12 months.

Does a Streamline refinance have to lower my rate?

It has to benefit you:

• Fixed to fixed: your new rate must be at least 0.50% lower.
• Fixed to adjustable: your new rate must be at least 2.00% lower.
• Adjustable to fixed: no rate reduction is required, even if the new rate is higher, since you are moving to a more stable loan.
• A shorter term can raise your payment and still qualify.

Do I need a credit check and appraisal for a refinance?

On an IRRRL, Lendia pulls a mortgage history and credit scores, and no appraisal is required. On a cash-out refinance, we need a full credit check and an appraisal.

Do I need my Certificate of Eligibility for a Streamline refinance?

No. Lendia checks your entitlement electronically.

Can I get a VA loan with no money down?

Yes. Eligible borrowers can buy with no down payment and no monthly mortgage insurance. A funding fee may apply, and loan approval, credit and property requirements apply.

Call Lendia at 949-333-4636 or complete a simple contact form. A Licensed Lendia CA Loan Officer will walk you through it.