Understanding the Updated 2020 VA Loan Limits

Updated 2020 VA Loan Limits

There are multiple benefits available for veterans securing a VA loan and recent updates make VA mortgage loans an even better choice for some.  To better prepare veteran borrowers for their next big purchase, let’s take a look at what the 2020 VA loan limit changes mean for upcoming applicants.

The 2020 VA Bill

Earlier this year, the Senate and the President approved the Blue Water Navy Vietnam Veterans Act to award veterans with higher benefits in healthcare and homeownership for 2020. The bill removed the previous loan limit of $484,350, allowing the Department of Veteran Affairs (VA) to support veteran borrowers seeking larger home loans.

VA loan limits represent the maximum zero-down amount that the VA can guarantee regarding good credit risk, but this does not represent the amount that a lender is guaranteed to approve. The final approval decision is still in the hands of mortgage lenders.

VA Loan Fees

As of January 1, 2020, veterans in nearly every county in the United States will be able to borrow at higher amounts—without making a down payment. However, removal of the loan limit comes at a small price to borrowers in the form of additional loan fees. Per the 2020 changes, the funding fee without a down payment is set at 2.30% for first-time users and 3.60% for subsequent users.

Spouses of veterans who died in active duty or suffered fatal disabilities from their service may be eligible to have these fees waived. Similarly, active-duty Purple Heart recipients will also be exempt from these fees, but there are other loan requirements that all veteran applicants must keep in mind. Regardless of the loan limits or applicable funding fees, borrowers must meet standard lender requirements regarding credit and income to qualify for VA mortgage loans.

VA Loans in Central Florida

Finding the right mortgage product to purchase or refinance a home can be difficult when the options and limitations are constantly changing. Fortunately, the loan experts at Butler Mortgage are here to help Central Florida citizens make the best borrowing decisions. Whether you’re looking for a VA loan or any other mortgage solution, our team of loan professionals will guide you through the optimal mortgage options for your finances. Call us today for a free consultation at 407-931-3800.

How to Qualify for Veterans Affairs Loans

va loans

Veterans, active military members, surviving spouses, and others may qualify for Veterans Affairs (VA) loans when purchasing homes. The Department of Veterans Affairs backs VA loans, and applicants may receive several benefits through the arrangement. Those who qualify for a VA loan may not need to invest in costly mortgage insurance or maintain as high a credit score as a conventional borrower.

Individuals who receive a VA loan are not required to provide a down payment. As long as the applicant meets the terms of the VA loan, it remains one of the most economical financing arrangements available in the real estate market today.

Do You Qualify for a VA Loan?

Here are some basic requirements to qualify for a VA loan:

  • You meet the minimum qualifications for credit and income that private lenders require.
  • You hold a legitimate Certificate of Eligibility (COE) as the result of your service.
  • You are the unmarried surviving spouse of a veteran who died, is missing in action, or who is a prisoner of war.
  • You are the surviving spouse of a completely disabled veteran.
  • You paid your previous VA loan in full or another veteran purchaser agrees to assume the responsibility for the remainder of the loan.

Use VA Loans for More

In addition to purchasing a home or condominium in an approved location, veterans can use the loan program to build new homes, improve preexisting homes with energy-efficient renovations, or purchase pre-built homes.

You may qualify for a VA loan if you currently hold a conventional mortgage as well. To take advantage of veteran benefits, refinance your home under the VA loan program, use your equity to improve your home or pay down debt, or participate in an interest rate reduction refinance loan to secure the lowest mortgage rates.

If you have questions about your eligibility, you can speak with a representative at the Department of Veterans Affairs or to a lender that specializes in VA loans. Butler Mortgage offers a free pre-qualification screening for veterans. See if you pre-qualify for your primary home VA loan today by calling 407-931-3800!