VA home Loans
Nevada
VA loans are mortgages offered by private lenders to people in the armed forces and their families. The Department of Veterans Affairs provides a Home Loan Guarantee on these loans, making them less risky for lenders. Because of this, they can offer unique benefits to eligible borrowers that you likely wouldn’t get with any other loan.
Eligible borrowers in Nevada include many of the state’s 200,000 veterans, National Guard members, and surviving spouses of military personnel.
The VA is required to treat all marriages equally; therefore, same-sex spouses of veterans in Nevada have the same rights to VA loans as opposite-sex spouses.
VA Home Loan Benefit
As the VA guarantees these loans, they work a little differently than conventional mortgages. VA home loans don’t have a down payment requirement, no mortgage insurance requirement, and no prepayment penalties. Moreover, they typically come with lower interest rates and more flexible credit requirements.
No Down Payment Required
Down payments in Nevada average at around $69,105, so it’s no wonder many homebuyers feel discouraged from purchasing a home. However, even though it can help you get more favorable terms, you don’t need to pay anything upfront to be eligible for a VA mortgage loan.
In other words, you can buy a home with 0% upfront.
No Private Mortgage Insurance Premiums
On average, Nevadans pay $757.95 a month for private mortgage insurance on conventional loans and $346.8 on mortgage insurance premiums for FHA loans. With a VA home loan, you don’t have a monthly insurance expense, so you can pay off your loan sooner or free up your disposable income.
Competitive Interest Rates
While VA loans do follow market fluctuations, they still have relatively low interest rates, allowing veterans to purchase their dream homes with lower expenses. This is especially important given the rising costs of housing in Nevada, with the typical listing 5.7% more expensive compared to the previous year.
Flexible Credit Requirements
While most lenders have their own requirements, the VA doesn’t set minimum credit score or income criteria. Typical VA home loan requirements are a credit score of 620 and a debt-to-income ratio of 41%, although more lenient options are possible, such as lenders going as low as a 500 credit score requirement.
With the average credit score in Nevada exceeding 700, most borrowers will be more than eligible for a VA home loan based on their score.
No Prepayment Penalties
You can pay off your VA home loan as early as you’d like, and the lender cannot charge you a prepayment penalty. This is a massive benefit compared to some conventional loans, letting borrowers be free from their mortgage sooner and without additional costs.
However, depending on your financial situation, this may not be a good idea, as you may lose mortgage interest tax deductions.
Assistance for Struggling Borrowers
Borrowers who are financially struggling get additional assistance options through cooperation with their loan servicer and the VA. There are several options available to help borrowers deal with financial hardship, including:
Repayment plans - You and your loan servicer create a repayment plan to address late payments.
Special forbearance - You agree with the lender to suspend or reduce your monthly payments for a limited period, usually three or four months.
Interest Rate Reduction Refinance Loans – IRRRLs are refinancing VA loans created to reduce your monthly mortgage payment, either through changing your term, interest rate, or other conditions.
The Veterans Affairs Servicing Purchase (VASP) program – If other methods do not work, a borrower may be eligible for the VASP. In this case, the VA buys your modified loan from your servicer, letting you keep your home.
Eligibility Requirements for VA Loan Borrowers in Nevada
To qualify for a VA loan, borrowers must meet the following service requirements and other considerations:
Active-duty service members and veterans must have served 90 continuous days in war or 181 days during peacetime.
Their discharge from military service must be under any conditions except for dishonorable.
National Guard or Reserve members must serve at least six years or have at least 90 days of active-duty service, 30 of those consecutive.
A surviving spouse qualifies if they haven’t remarried and their spouse died on active duty or due to service-connected disability. They may also be eligible if they are the spouse of an active duty member listed as MIA or POW for at least 90 days.
Prospective VA borrowers who have been discharged under DADT and who aren’t satisfied with their discharge status can apply for an upgrade.
Certificate of Eligibility
All borrowers, including qualified spouses, veterans, and National Guard members, need a Certificate of Eligibility (COE) to:
Prove they meet the eligibility requirements
Submit the VA home loan application
Determine their level of entitlement
There are also three ways to get a COE:
On the VA website – You may be able to get a COE automatically on the VA portal.
Through your VA lender – Your VA lender may be able to acquire the certificate for you.
By mail – You can request a COE by completing the VA Form 26-1880 and mailing it to your regional loan center.
The VA Loan Process
Get your COE: The Certificate of Eligibility verifies a borrower's ability to get a VA Loan. Pride Lending can help you obtain your COE, making the process seamless.
Check Finances: Determining a budget is crucial to determining how much house you can afford. Examine how much money you have after necessities, such as utilities. An expert at Pride Lending can help you learn more about your debt-to-income ratio and finances.
Choose a Lender: Work with a lender like Pride Lending, a VA loan specialist. Your lender must understand how VA loans work, can guide you through the requirements, and maximize your benefits.
Shop for a House: Next, it’s time to find a house you’d like to purchase. Work with local real estate agents or check out online listings to find houses within your price range. Ensure your home meets your requirements, such as how many bedrooms it should have.
Purchase Agreement: A purchase agreement is a legally binding contract between the buyer and seller. These contracts outline the terms of the sale to protect the buyer and seller. For example, a buyer may put a clause in the contract if the appraisal value is lower than expected. Many contracts include an Earnest Deposit Clause, which details how much the buyer will put down as a deposit and terms for refunding the deposit, such as if the buyer doesn’t make certain repairs.
Inspection and VA Appraisal: An inspection is often recommended because it gives an in-depth look at the home’s condition. Buyers can negotiate a more favorable price if they have to spend significant money on repairs. A VA appraisal is required to obtain a VA loan. An independent VA appraiser will look at the property’s condition and ensure it meets the minimum property requirements to ensure veterans or their families don’t wind up with unsafe property.
Complete Underwriting: Underwriting is the process lenders use to evaluate a borrower’s financial situation. You’ll need to submit proof of income, expenses, and assets. A lender will determine your debt-to-income ratio, look at your credit score, and evaluate your finances to determine your eligibility for a loan.
Closing: Finally, you attend the closing and sign all necessary papers. The funds are sent to escrow, the loan closes, and you receive the keys to your new home!
VA Loan Limits and Funding Fees
Nevada VA loan limits have been eliminated for most veterans with full VA loan entitlement, which covers most veterans, service members, and eligible survivors.
In order to have full entitlement, this must be your first time applying for a VA home loan, or you have already repaid your previous loan in full. In these cases, the VA loan limit does not apply to you.
People with remaining entitlement (who have an active VA home loan already or still own the home they purchased with their previous VA loan) still qualify for a VA loan. However, the VA will only guarantee a part of their loan based on county VA loan limits minus their used entitlement.
However, your lender will determine the total loan amount based on your financial history, assets, income, and debt-to-income ratio.
Funding fees are another key consideration. As VA loans work with the help of taxpayer money, borrowers need to pay a one-time fee to reduce the impact on public funds. Here’s what VA funding fees look like in 2024.
Borrowers using VA mortgages for the first time will pay:
2.15% for down payments between 0% and 4.99%
1.5% for down payments between 5% and 9.9%
1.25% for down payments of 10% or more
For each subsequent use, borrowers will pay:
3.3% for down payments between 0% and 4.99%
1.5% for down payments between 5% and 9.9%
1.25% for down payments of 10% or more
Borrowers who are exempt from paying a funding fee include:
Disabled veterans receiving or eligible for service-connected disability compensation
Borrowers with pending pre-discharge claims
Dependency and Indemnity Compensation recipients
Purple Heart recipients
Surviving spouses of veterans who died in service or from service-connected disabilities