Applying for a Mortgage Loan For Military
posted May 16, 2012
We also provide guidance throughout the loan process so that you can be confident that you have met all of the expectations and qualifications for the mortgage loan that is right for you and your family. For instance, before buying a new home, a family should determine how much they could afford to spend for a monthly payment, which includes mortgage, taxes, insurance and other housing-related expenses. As a service member, there are military mortgage loan programs that may offer additional assistance to you and your family, such as help with a down payment or closing costs.
As you begin, the first thing you should do is to prepare a budget of your projected income and expenses per month for the next year. Most lenders will only use income that is expected to continue for three years. This means that if you are receiving BAH (basic allowance for housing) pay, or another allowance, you will need to show proof that you will continue to receive those payments for at least three years in order for a lender to include it in your qualifying income.
Once you have an outline of your finances, you can get an accurate idea of how much you can afford to spend on housing. The online calculator found at the Ginnie Mae website is a useful tool for service members to help determine this amount. The calculator asks you to enter the information from your budget and then provides you with a comparison of what you could afford based on the general guidelines of VA, FHA and conventional mortgages.
These calculations are based on the ratio of your expenses to your income. This ratio helps lenders determine a borrower’s maximum loan amount. Ideally, lenders want you to devote less than a third of your monthly income to your monthly debt payments. Most lenders consider monthly debt to be the sum of the consumer’s car payments, mortgage payments, credit card payments, outstanding collections and student loan payments. However, some programs may also consider the individual’s utility costs for their home or other expenses. Therefore, it’s vital that you determine your personal budget first; it can give you insight into what your mortgage lender will determine regarding your creditworthiness.
Some military mortgage loan programs may offer additional benefits for service members and their families. A VA loan is a mortgage insured by the Department of Veterans Affairs, and is only available to active service members and veterans. For you to qualify for this loan program, you will need to obtain a certificate of eligibility from the VA that proves that you are an active service member or veteran. You can obtain a certificate at the VA’s website or apply by mail. Depending on the specifics of the loan, you may receive assistance with your down payment or closing costs. This assistance may be in the form of a gift from a relative, concessions from the seller of the home, special bond program, or an employer grant.
The task of moving, relocating, or simply buying your first home can be stressful on military families, but there is help available. Housing 1 Source is here to provide you and your family with the resources you need to make your transitions as easy as possible. If you have further questions about military mortgage loan programs, please contact Housing 1 Source. We are military relocation experts!