WHAT YOUR CIVILIAN SPOUSE MAY BE WONDERING ABOUT YOUR VA LOAN AND VA IRRRL ELIGIBILITY
While buying a home is the American dream, the process can keep you up at night. And when you find yourself suddenly awake with a mind full of questions, don't be surprised to find that your spouse is staring up at the ceiling as well. This is true of the majority of homebuying couples but especially so in military marriages like yours where one partner is a civilian. If you could eavesdrop on your partner's doubts and what ifs, you might hear questions like:
- Will my income or financial standing get in the way of our getting a VA loan?
- What if mortgage rates go down? Can we re-finance?
- What happens, if God forbid we divorce.... or worse? Will the mortgage be affected?
The answers will all reassure him/her.
- When it comes to co-signing the loan, yes, the second income will impact the loan, but for the better. In fact if it's substantial enough, it may even serve to qualify you for a larger loan. As for financial standing, as in any the case of a conventional mortgage, it could go either way. A poor credit rating will harm your chances of getting a mortgage, and even if (s)he is current in credit card and/or existing loan payments, their existence will raise your debt-to-income ratio which is viewed as a negative.
- Yes, you can refinance if it will lower your payments. You can apply for a VA IRRRL. Also known as a streamlining, or a VA-to-VA loan, a VA Interest Reduction Rate Refinance Loan, as the name suggests, lowers your interest rate by refinancing your existing VA loan, so your monthly payments should decrease. If you are applying for an adjustable rate mortgage (ARM), and the adjusted rate rise, you can get a VA IRRRL. However, it can only be used on an existing VA loan based on your eligibility and entitlement.
- Should your civilian spouse find him/herself a surviving spouse, and hopefully he or she never will, a VA loan will still be an available option. According to the Honoring American Veterans and Caring for Camp Lejeune Families Act of 2012, not only are surviving spouses of partners who die in military service, or of a service-related cause, eligible for a VA loan, but also if the veteran was disabled and eligible for disability compensation from any cause, at the time of death. Spouses of service members who were POW veterans for at least 90 days or MIA are also eligible.
- Should the marriage end in divorce the spouse can remain in the VA loan house providing (s) he was a co-signer. However the VA has very specific rules as to who can live in the house. Sifting through the wording can lead to confusion, so it's best to talk to a VA loan specialist to avoid misunderstandings.
For more information or questions about refinancing,
Please visit http://www.mhlmtg.com/ecamp/VAIRRRL_1130fb