Are you asking yourself, “Are VA loans assumable?” The short answer is yes. Even borrowers without the usual military service qualifications may be able to tap into the cost savings of a VA loan. Thats because VA loans are assumable.
Who Can Assume A VA Loan?
When originally taking out a VA loan, the borrower must meet specific military service requirements. In addition to the service requirements, lenders will evaluate the borrowers financial information to ensure they can repay the loan.
But when assuming a VA loan , the new borrower will not need to meet any military service requirements. With that, non-veterans can assume a VA loan. As with the original loan, the new borrower will need to prove their financial qualifications to the lender.
Requirements To Assume A VA Loan
As a borrower, the process will differ from taking out a new mortgage . Instead of shopping around for the best available rate, youll work with the sellers lender to prove your creditworthiness. If the lender approves your financial qualifications, then you can move forward with a VA loan assumption.
The VA doesnt publish minimum borrower requirements. But many lenders will only work with borrowers that meet certain financial criteria. Here are a few of the common requirements:
- Credit score: Youll need to have a minimum median credit score of 580 to work with Rocket Mortgage ® for a VA loan.
- Down payment: A VA home loan typically doesnt require a down payment. But the new borrower may need to make a down payment in some cases.
- Income: Youll need to have enough income to support the loan amount.
- Funding fee: A VA loan assumption will come with a funding fee equal to 0.5% of the loan balance.
If you are considering a VA loan assumption as a path to homeownership, then meeting the requirements above is a great first step. Continue reading “Are VA Loans Assumable? Everything To Know About VA Loan Assumption”