Illinois Regional Guide:
Va Home Loan Limits in Illinois Guide
What is VA Loan?
Having a home is everyones dream, if you are one of them, we are here to help you. VA helps Servicemembers, Veterans, and eligible surviving spouses become homeowners. A VA loan in Illinois is a mortgage loan (VA direct or VA-backed loan) in the United States guaranteed by the United States Department of Veterans Affairs (VA).
What are the VA Loan Eligibilities?
The program is for American veterans, military members currently serving in the U.S. military, reservists and select surviving spouses (provided they do not remarry) and can be used to purchase single-family homes, condominiums, multifamily properties, mobile homes, manufactured homes and new construction. You will need Certificate of Eligibility (COE) to show your lender that you qualify based on your service history and duty status.
A Veteran who has used their entitlement to previously purchase a home, may have entitlement left to purchase another one. If you previously purchased a home using your VA Benefits then you might still have some of that "Entitlement" available to you for the purchase a new home. To Calculate Maximum Entitlement available, consider the following:
1- If your previous home was purchased using a VA Loan, and that loan was paid off by the new owners, the full entitlement may have been restored.
2- If you sold your home to someone, and allowed them to assume your VA Loan, then you might have the full entitlement restored, if one or more of the purchasers were also Veterans.
3- If you still own the home, and you are renting it out - you might be able to purchase a new home using your partial entitlement, but there are several restrictions.
Va Home Loan Limits Benefits:
Major benefits of VA Loan are:
• No Down Payment Required
- By far, the single-largest benefit of the VA loan is that qualified Veterans can purchase without a down payment. This huge advantage allows Veterans and service members to buy homes without having to spend years saving for that typical lump-sum payment.
• No PMI
- Another benefit is that there is no PMI (Private Mortgage Insurance, the monthly insurance fee charged to protect the bank until you reach at least 20 percent equity) required by other FHA and conventional loans.
• Competitieve Interest Rates
- VA interest rates are typically 0.5 to 1 percent lower than conventional interest rates. Lower rates help Veterans save every month and over the life of their loan.
• Relaxed Credit Score
- Veterans do not need anything near perfect credit to secure home financing at competitive interest rates. VA loans are also more forgiving when bouncing back after a bankruptcy, foreclosure or short sale.
• No Prepayment Penalties
- The VA loan allows borrowers to pay off their home loan at any point without having to worry about a prepayment penalty. Borrowers are free to consider future home purchases and refinancing options with the absence of a prepayment penalty.
Va Home Loan Limits Requirements:
• Down payment requirements- For Va Home Loan Limits, VA Direct does not require down payment but VA-backed lenders may ask for down payment for Va Home Loan Limits.
• Have DD214 or Certificate of Eligibility- The Veteran also needs to supply their DD 214 and Certificate of Eligibility (COE)
• Credit and Income requirements- Keep in mind that for a VA-backed home loan, you will also need to meet your lender credit and income loan requirements to receive financing
• Interest Rates- VA eligible may enjoy Competitively low interest rates. In 2022, the national average 30-year VA mortgage APR is 6.50%, up compared to 2021 average - 6.79%. The national average 30-year VA refinance APR is 6.55%, up compared to November 2022 of 6.89%.
Va Home Loan Limits Application Process:
You will need the following paperwork to apply:
Copies of your W2 statements for the past two years, so your gross household income can be confirmed,
Copies of your previous two pay stubs,
Documentation of other assets (checking accounts, savings accounts, financial investments, trust funds, etc.),
If self-employed, two years of consecutive tax returns will be required.
The Veteran also needs to supply their DD 214 and Certificate of Eligibility (COE)