KENTUCKY VA HOME LOANS
Kentucky VA loans require little to no money down. Also, you will not pay a monthly mortgage insurance premium (MIP) or an upfront fee like you would with a conventional, low-down-payment home loan.
The VA does not have a private mortgage insurance (PMI) requirement.
Kentucky VA Loan Eligibility Requirements
Only certain veterans and their spouses qualify for VA-backed mortgages. The good news is the qualifications are not as strict as you think. Here are the VA’s eligibility requirements:
• Active-duty service for 181 days during peacetime
• Active-duty service for 90 consecutive days during wartime
• Member of the Reserves or National Guard for six consecutive years
• Married to a veteran who died as a result of a service-connected disability or in the line of duty
Remember that it is ultimately up to the lender to decide to give you a loan. You will still need to meet certain requirements outlined by the bank or mortgage company.
Basic and Bonus Entitlement
The VA refers to your eligibility to borrow money using a VA-backed mortgage as your basic and bonus entitlement. The word “entitlement” is another word for insurance. However, your basic and bonus entitlement are not the same, but you can use them at the same time. Here is how they work:
When you receive your certificate of eligibility (COE) from the VA, it will show you are eligible for $36,000 in basic entitlement. Fortunately, the $36,000 on your COE is not the maximum amount you can borrow. The figure is how much the VA will pay if you default on your loan.
Most banks and mortgage lenders will lend you up to four times your basic entitlement, which is $144,000 ($36,000 x 4 = $144,000). So, using your basic entitlement, you can borrow up to $144,000 to buy a home. You might be thinking $144,000 is not enough to buy a home in most places, and you are right. This is where your bonus entitlement kicks in.
Kentucky VA Home Loan Refinance Information
You can use your VA home loan entitlement for more than just buying a house. You can use it to reduce the interest rate on an existing loan (known as an IRRRL), or you can take out some equity in your home with a 90% to 100 percent cash-out refinance.
Additionally, you can use a VA home loan more than once as long as you have not used all of your basic and bonus entitlement. Now that you know the facts behind VA mortgages, you should comfortably find the loan program that fits your needs.