Assistance For Vets with Conventional or Sub-Prime Home Loans
There is plenty of help and counseling available for VA borrowers should they get into trouble with their VA mortgages. But what about veterans who have borrowed money for conventional or sub-prime loans? Is there any help for them?
Fortunately the VA does not ignore this segment of the veteran and currently-service military population. The Department of Veterans Affairs has several programs for non-VA borrowers who have served in the U.S. Armed Forces. The most basic resource for veteran borrowers who might be in trouble with their loans is the network of eight regional VA loan centers, plus two servicing centers across the United States. These VA loan centers offer advice and assistance for all veterans who need mortgage loan help.
VA borrowers have one distinct advantage over non-VA borrowers. When a VA rep helps a homeowner with a VA mortgage, they are authorized to initiate proceedings with the lender on behalf of the borrower. But conventional and subprime borrowers don’t have the same luxury. According to the VA official site, “…unlike when a veteran has a VA-guaranteed home loan, VA does not have the legal authority to intervene on the borrower’s behalf. It is imperative that a borrower contacts his/her servicer as quickly as possible.”
One option a veteran with a non-VA guaranteed mortgage loan has is to refinance with a VA loan. The VA offers refinancing of conventional and sub prime loans. The Veterans’ Benefits Improvement Act of 2008 allows vets to refinance up to 100% of the home’s value.
Before the 2008 act was passed, borrowers could only refinance 90%. The VA official site adds, “Additionally, Congress raised VA’s maximum loan guaranty for these types of refinancing loans. Loan limits were effectively raised from $144,000 to $417,000. High cost counties have even higher maximum loan limits.”
Borrowers who want to refinance should take steps to do so before they begin missing payments on their current home loans if possible. A borrower current on their conventional mortgage will have an easier time qualifying for a VA refinancing loan, though there are programs aimed at borrowers who are delinquent and trying to save their home.
Some refinancing programs require a borrower to be current on their home loans while other types of assistance are designed specifically for borrowers who have missed several payments. Borrowers should not assume refinancing is not an option.