VA Streamline Loan Questions - FAQ

National Bank Of Kansas City has completed thousands of VA loans over the years and many borrowers have the same questions. Here’s a list of the most often asked questions during the VA loan process. If you have a question that’s not listed, do not hesitate to call us at 1-800-375-8096 so we can help.

Are you part of the VA?

No, we are not the Veteran’s Administration nor are we affiliated with the VA. The VA is not a lender; they merely insure the mortgage which is why we are able to give a great loan to veterans. As a VA approved lender in all 50 states, we provide you the information and options regarding VA loans.

Why should I ask for more information through this website?

National Bank Of Kansas City is a nationwide approved VA lender and set up this website to help veterans and military personal with home loans. Our loan officers are VA specialists and have the knowledge to answer your VA mortgage questions.

What is a COE? Where can I get it?

COE stands for Certificate of Eligibility. If you are buying a house you will need to have this certificate available to show you are eligible for a VA loan. If you need help getting a copy of your COE, mention that when you ask for a no obligation quote, and we will be happy to help you.

Do I need my certificate of eligibility again for a streamlined refinance?

No, since you had it when you got your original VA loan, there is no need to provide your certificate again when you complete a streamline refinance.

Why should I get a VA loan versus a conventional loan?

The VA loan is a program set up to help active duty and retired military personnel purchase homes. VA loans can provide up to 100% financing on a home at a very competitive rate without the borrower having to pay mortgage insurance. With the current mortgage situation, there really isn't any other great options for 100% financing. It's truly the best way to obtain 100% financing in these unique days.

What is the VA funding fee?

The VA funding fee is added to your loan and it goes to the Veterans Administration. This amount is essentially an insurance premium to the VA for backing your loan. This is how you can obtain a great financing option. If you are/were active duty during your first use of a VA loan, your funding fee is 2.15%* of the base loan amount. For each additional use it is 3.3%.

I am a disabled veteran. Do I need to pay the VA funding fee?

If you are rated 10% disabled or higher, you will be exempt from paying the VA funding fee. If you fit this criteria, be sure to inform your lender so you won't be charged the VA funding fee at closing.

How do interest rates change?

Interest rates can be very volatile and can be difficult to predict in the long term. Generally, as the price for US Treasury Bonds increase, rates will decrease, and vice versa. Interest rates are updated every morning, and sometimes throughout the day if the financial markets are changing.

Does the VA control interest rates for VA loan programs?

No, the VA does not directly influence interest rates. The rates are set by banks buying and selling mortgage bonds. VA interest rates change just like conventional loans.

I heard the Federal Reserve lowered the prime rate. How does this affect VA loans?

The lowering of the prime rate does not affect VA loan rates as much as many people think. While it's related, the Federal Reserve doesn't directly affect long term rates such as the VA home loan.

Does it matter what your credit score is with the VA?

The VA doesn’t put a great amount of emphasis on credit scores. Please contact one of our home loan specialists to request a VA loan quote.

Do VA loans have closing costs?

Yes, all VA loans have some type of closing costs. You may be able to find a loan with no lender fees, but you’ll still have to pay for title work and other third party costs involved with buying a house.

What are the benefits of a VA loan?

The VA loan offers 100% financing with no PMI (mortgage insurance). You are eligible for a streamline refinance if rates go down. A streamline refinance does not require a new appraisal. Be sure to request a quote for a streamline refinance if you want more information.

Is there a pre-payment penalty on a VA loan?

No, there is no pre-payment penalty on a VA loan. You are allowed to pay off the loan partially or in its entirety at any time without a penalty.

Can I purchase an empty lot with a VA loan?

Unfortunately, you cannot. However if you are building a house you can use your VA eligibility for the end financing when the house is nearing completion.

Can I use my VA eligibility multiple times?

Yes, your eligibility is reusable depending on the circumstances. Normally, if you have paid off your prior VA loan and disposed of the property, you can have your used eligibility restored for additional use. Also, on a one-time only basis, you may have your eligibility restored if your prior VA loan has been paid in full but you still own the property.

What is the difference between closing costs and pre-paid items?

Closing costs are costs associated with setting up of the loan, such as underwriting fees, attorney fees, title insurance etc. Pre-paid items are costs associated with the maintenance of your loan such as setting up escrow for taxes and insurance. Pre-paid items also cover any interest your loan will accrue from closing time up until the first day of the following month.

What is the fee for a second time use of a VA loan?

3.3% for 100% financing. If you have 5%* to put down then it is only 1.5%. If you are a disabled veteran, you will always be exempt from this fee.**

Can I use a co-borrower to help get approved?

VA guidelines will only allow a spouse to be a co-signer. If the veteran is unmarried then the individual needs to be approved on their own.

Can I use my parent's eligibility for myself?

No, only the veteran themselves, or the surviving spouse of a veteran killed during active duty is eligible for the VA benefits.

How soon should I apply for a VA loan if I do not have a house in mind yet?

You can get pre-qualified at any time for your VA mortgage, even without a property or house in mind. Many times this is the best way to go so you can solve potential problems before you have a sales contract. This will make the process easier for all parties involved.

Can I get an interest-only loan?

The VA loan does not offer an interest-only option at this time. The most popular loan option is the 30 year fixed.* It gives the best combination of a low payment with a rate that will never change.

Can I use my spouse as a co-borrower?

The spouse is the only possible co-borrower allowed on a VA loan. You can use your spouse's income to help approval.

Can I use a VA loan to start a business?

If you are looking for a business related loan you should contact the VA directly for more information.

Is it possible to have two VA loans at the same time?

Generally, it is not. However, there are unusual circumstances where it may be possible. Ask your lender, or mention this in your free quote application to find out if it will work for you.

Is there any obligation or cost to get pre-qualified?

No, it does not cost anything. We will be happy to assist in seeing if pre-approval is possible for you. There is never any fee or obligation to get pre-approved.

What is the difference between a VA loan and a conventional loan?

In today's changing mortgage market, the VA loan is the only legitimate option for 100% financing with a good fixed-interest rate. Conventional loans will cap you at 97%* financing, and will most likely include mortgage insurance.

Are the VA rates better or worse than conventional rates?

It depends on your specific situation. It would be smart to compare both before making a final decision. However, if you have a small or no down payment, the VA loan will most likely be better suited for you.

Does my credit score affect my interest rate?

Your credit score does affect your rate on a conventional loan but not with a VA loan. But the VA doesn't change the rate based on credit score.

Can I get a VA loan after having a bankruptcy?

The fact you have been adjudicated bankrupt does not in itself disqualify you for a VA home loan. The following rules apply:

• If the bankruptcy was discharged more than 2 years ago, it may be disregarded
• If the bankruptcy was discharged within the last 1 to 2 years, it is probably not possible to determine that you are a satisfactory credit risk unless both of the following requirements are met:
• you have reestablished satisfactory credit, and
• the bankruptcy was caused by circumstances beyond your control (such as unemployment, medical bills, etc.)
• If the bankruptcy was discharged within the past 12 months, it will be difficult to determine that you are a satisfactory credit risk.

Does my veteran home loan entitlement ever end?

Your VA home loan entitlement is a lifetime benefit that you are given for military service.

My realtor has suggested that VA loans are not worth it. Is this true?

Years ago, VA loans were harder to get approved in a timely fashion. But now the approval process is almost identical to a conventional loan. Your realtor isn't doing you any favors if they say to avoid a VA loan.

How do I find out how much I can afford?

The first step is to get pre-qualified. It's generally a good idea to do this before putting an offer down on a particular house.

Do I need to put money down in order to purchase a house with my VA Loan?

No. The VA loan is the only legitimate remaining option to buy a house with no money down.

How much can I borrow with my VA Home Loan?

You can borrow 100% up to $417,000 as long as you are approved for that amount. On a streamline refinance you can borrow the same amount that you currently owe without needing to go through vigorous underwriting analysis or get a new appraisal. If you are planning on buying in Alaska or Hawaii then you can go above $417,000.

Should I consider an adjustable rate VA loan?

If you believe you will move before the temporary fixed rate term ends, then it would make sense to consider an adjustable rate VA loan. However, if there is a chance you will stay long term in this house, the safe bet would be to stick with a fixed rate.

How can I get more information about a VA loan?

You can contact the VA directly or ask a professional loan consultant who specializes in VA loans. When you fill out the online quote application you will be contacted by one of our loan specialists.

Can I use my veteran loan benefit to purchase a second home?

No, your VA loan has to be used on your primary residence.

I am currently active duty; can I still receive a VA home loan?

Absolutely! It must be you or your spouse's primary residence, however.

* Example: For $150,000 loan; 360 monthly payments of $809.26 are based on principal and interest only, and an annual percentage rate (APR) of 5.068%. APR is subject to borrower qualification and subject to change. Third party fees may apply.

** According to the United States Department of Veterans Affairs.