When most people think about home improvement loans they usually think it’s an FHA or some other type of rehab loan. But the truth is, there is a VA home improvement loan. We’ve been getting a lot of calls requesting information on this.
The VA home improvement loan allows you to complete the projects you’ve been wanting to do for your home: install new carpet, upgrade your bathrooms, or even make a home theater. There are no limitations. In this post, we’re going to go over the steps on how you can obtain a VA home improvement loan.
The VA Home Improvement Loan Checklist
1. You Must Be Eligible for a VA Loan
In a nutshell, if you’ve served sufficient time in the military or you’ve been honorably discharged, you’re likely eligible. You can always check the Department of Veterans Affairs page on VA home loan eligibility or you can give us a call at 855-223-0705 and we can help determine if you’re eligible.
2. Get an Appraisal
Why do you need an appraisal before getting a VA home improvement loan? Let’s say your mortgage balance is at $250,000 and you want to make $100,000 worth of improvements. We would need to make sure your home appraises for at least $350,000.
Remember, on a VA loan you can get 100% loan-to-value (LTV), meaning you can get the full amount of equity you’ve built up (a conventional loan only allows up to 80% LTV). However, if you want to finance your closing costs, those do get subtracted from the cash you can take out.
So to recap, if you want to use your equity, we need an appraisal to make sure that your mortgage balance and the amount you want to make in home improvements match the appraised value.
3. You Have to Qualify
The main thing is you need income; however, income doesn’t always mean employment. For example, there are veterans living off of retirement, veterans with disabilities receiving pensions, or even veterans who receive income from real-estate or stock market investments. No matter where it comes from, you will need some sort of income.
You’ll also need a decent credit history. Again, I want to emphasize history and not your score. Your score doesn’t need to be excellent or even good. One of the major benefits of VA loans is the more lenient credit standards. We’re just looking for decent credit history.
Get Started Today
As you can see, this isn’t a very long list or a complicated list. Again, you can call us at 855-223-0705 or get in touch with us online if you have any questions or are interested in a VA home improvement loan. Let us help you out with any home improvements you’d like to accomplish.