Home Purchase - Home Refinance
For Properties in MN WI IA ND SD CO FL
Life can throw us some curves. Sometimes that means even the best of us may have ended up having financial issues that lead to a foreclosure.
But having an old foreclosure does not prevent you from getting a new loan in the future, even if you've had a foreclosure on a previous VA loan.
There are some simply rules you need to understand for a new loan after a foreclosure:
Once you've had a major negative credit event like foreclosure, the lending guidelines require you wait a minimum period after the even before you can get a new loan. The minimum period depends on what type of loan the new loan will be.
You may read elsewhere of shorter waiting periods for extenuating circumstances. These are extremely hard to get, and requiring meeting very strict 'beyond your control' guidelines. The VA specifically states unemployment, prolonged strikes, medical bills not covered by insurance, don't qualify. It also says divorce is not viewed as beyond the control of the borrower/spouse.
Once your mandatory waiting period is over, you still must need all normal and regular loan guidelines for debt-to-income ratios, credit scores, etc. They will specifically like to see a pattern of re-established credit, and acceptable credit scores, which may often be your biggest hurdle.
Military personal who have met the requirements for a VA home loan get what is known as a VA loan Entitlement. Your basic entitlement is $36,000. The simple way to explain this is that is the amount the VA will guarantee to your lender of you default on the loan.
As home values went up, Congress, instead of just increasing the entitlement number, came up with this goofy 'secondary' entitlement system, which is $68,250.
Lost yet? No worries, let me explain.
When it comes to a previous VA foreclosure, any amount the VA had to pay out to the old lender gets charged to your available entitlement amount available. You can not access that used up amount again UNLESS you pay the VA back for your loss.
Depending on how much entitlement was charged for your previous lost will determine how much hew house you can buy with a new VA loan.
An Example of using your remaining entitlement:
Let us say you bought a home previously that was lost to foreclosure. The VA paid out a claim to the lender for $36,000, the maximum primary entitlement. That amount is no longer available to you, but the secondary entitlement is still there in full for $68,250.
You can buy a home zero down with up to 4 times your remaining $68,250, or $273,000.
But wait, there is more (well, it's the government you know)
Because there is the 'primary' entitlement and 'secondary' entitlement, in this example, you have no primary entitlement left, so you could NOT you could NOT buy a home less than $144,000 $36,000 x 4) - but you COULD buy a home for up to 4 times your secondary entitlement, so $273,000 ($68,250 x 4).
Weird huh?
The bottom line is that if you have an old foreclosure, even a VA foreclosure, please reach out to our Licensed Loan Experts at (651) 552-3681, or just apply online for your VA loan to see what programs are available to you today.
Top rated nationally and locally year after year. Because clients agree - expert Loan Officers, interest rates you can brag about and amazing service sets us apart from the big banks and internet lenders.
33 Wentworth Ave E, St Paul, MN 55118
(651) 552-3681
Loans@VAMortgageMN.com
Cambria Mortgage, Inc | NMLS #322798
Branch Manager: Joe Metzler, NMLS #274132
Branch NMLS #1888858
We are not acting on behalf of, or under the direction of the VA or the Federal Government. The Veterans Administration does not lend directly to the public, only through approved lending institutions like us here at Cambria Mortgage.
The Department of Veteran Affairs requires mortgage companies who offer VA Loans go through a stringent approval process. We are proud tp a VA approved mortgage lender and are proud to help military families use their VA Loan Benefits.
Equal Housing Lender, Cambria Mortgage NMLS# 322798. Our lending services provided only in the following states: Minnesota, Wisconsin, Iowa, North Dakota, South Dakota, Colorado, and Florida. This is not an offer to lend or to extend credit, nor is this a guaranty of loan approval or commitment to lend. The information here may not be up-to-date and may no longer be accurate. Products and interest rates are subject to change at any time due to changing market conditions. Actual rates available to you may vary based upon a number of factors. Consumers must independently verify the accuracy and currency of available mortgage programs. All loan approvals are subject to the borrower(s) satisfying all underwriting guidelines and loan approval conditions and providing an acceptable property, appraisal and title report. © 1998 - 2023, Joe Metzler, NMLS 274132
Rates listed here are national averages. Your actual interest rate may vary based on your personal situation, loan type, credit scores, and closing cost choices. Lower rates available by paying discount points (higher closing costs). Lower closing costs available by taking a higher interest rate. Rates below reflect PURCHASE loan interest rates, refinance rates tend to run higher.
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