There are several things we suggest you look over before applying for a VA home loan through Skyridge Lending, LLC. Reviewing your budget, credit report, and employment history before you apply can make a big difference in the VA eligibility process.

Budget Those applying for a VA home loan should pay special attention to personal budgets. It is essentially up to you to determine if you are ready and able to allocate monthly payments towards your future home. Lenders don’t have access to budgetary obligations outside of your credit report. We consider items listed in your report merely for qualification purposes and aren’t able to collectively determine if you are able to afford your future home loan payments. Some things to look for when budgeting include:

• Income – subtract the income taxes from your salary to produce the “take-home” pay per month

• Bills – Add up any monthly bills such as phone, cable, utilities, and credit cards. Don’t forget to consider any irregular bills like licensing and insurance.

• Other Expenses – Look at how much you average spending on food, gas, and activities throughout the month. These costs can consistently take up a large chunk of your budget.

• Savings – An important aspect new homeowners overlook is the need to set money aside each month for future home improvements, maintenance, and emergency repairs. Things happen, and it’s too easy for homeowners to neglect the upkeep of a home, eventually deteriorating the value of their investment.

In many cases, you can purchase a home for a similar payment or less than what rent would cost in your area. But keep in mind, that is offset by the added cost of maintaining your property. If you are ready for the financial responsibility of owning a home, the next step for us at Skyridge Lending, LLC, is to observe if you have payment shock. Payment shock is basically what happens when a homeowner’s monthly housing payment increases. Studying your payment shock will help us better ensure you are prepared to make housing a bigger part of your budget.

Credit Report There are three major credit bureaus that can provide you with accurate and free credit reports: Equifax, TransUnion, and Experian. You can get a free copy of these once a year from AnnualCreditReport.com. Click here to learn more about maximizing your credit history. (Link this to the part on credit) Once you receive your credit report, some things to look for are derogatory credit items, errors, revolving debt, and your credit scores. Derogatory credit items are negative items that represent risk to lenders. They are indications of delinquency or late payments. Sometimes those items are incorrectly recorded. Make sure to double-check for errors within the report. An error can occur if you accidentally applied for credit under different names, entered inaccurate address information on an application, or messed up your Social Security number. These items can usually be fixed and removed to improve your credit score. In some cases, these errors simply require an explanation. We can customize a plan for your situation so that you can successfully get a mortgage loan. Most things can be taken care of quickly, while some can take longer to line out. Contact us to create a detailed plan today! Your credit score is very important when applying for a VA home loan as it can affect your interest rate and payment. A credit score is basically the numerical representation of your credit history and creditworthiness. Credit scores are used to determine two things when it comes to VA loans:

• What your interest rate is going to be on your new loan

• Your eligibility for the new VA home loan, meaning your approval or denial, and at what loan size or purchase price amount

The minimum credit score requirement can vary with other lenders’ overlays. At Skyridge Lending, LLC, we match VA guidelines, which currently allow for scores down to 500 case by case, and as low as 560 for 100% financing purchase and 580 for 100% financing as a cashout refinance. (Refinances(this can be where the VA refi tab takes them as well)) We also do the VA Refinance loans. VA has two options for these. If you are already on a VA loan and want to reduce your loan then a great option is the VA IRRRL or Interest Rate Reduction Refinance Loan. This option typically doesn’t require an appraisal and has very low closing costs. This streamline option doesn’t verify income or assets and as long as your mortgage is not over 30 days late for the past year then you qualify, no matter what your credit score may be. VA also allows for full qualifying refinances in order to allow up to 100% cash out giving you access to the full equity value of your home. This usually requires a 580 minimum score to go to 100% or a 500 to go to 90% loan to value.

Employment History Before you apply for a VA home loan, it is important to ensure you or your veteran has met the employment requirements set by the Department of Veteran Affairs. These requirements say a veteran must have at least two years of consistent, full-time employment. Having a job gap does not keep you from receiving a VA loan, but providing an explanation for this gap is crucial. Full-time schooling can count as history as well depending on your line of work and the details so contact Skyridge Lending for more information about this topic.

Purchase Price and Payment Amounts Skyridge Lending, LLC can help you calculate the payment to match your budget and qualifications, helping you determine the purchase price you can offer. The VA does allow the buyer to have the seller pay most of their closing costs. One of our loan officers can work with you to help determine this amount and negotiate this into your offer. The VA home appraisal will need to be paid by you, the buyer up front in most cases. Price varies by location and is set and published by the VA directly. Please contact us today to go over this in more detail.