The VA home loan is a benefit for active duty service members, veterans and military families. It has helped millions of service members and their families purchase a home at reasonable financial terms when they thought it may not be possible. Current and former military members who are interested in purchasing a home should consider the VA home loan as it has many great benefits. The VA does not lend money, however, it backs loans made by private lenders. As a veteran myself, I strongly suggest looking into this amazing benefit and taking advantage.
The Benefits of VA Home Loans
If you are eligible, knowing its benefits can pay off dividends. The two biggest benefits of the VA loan that make home buying affordable are that typically the buyer does not have to make a down payment and there is no private mortgage insurance (PMI) requirement. Here’s a look at the complete list of benefits, as taken directly from the Veterans Affairs site:
- No down payment required (unless required by the lender or the purchase price is more than the reasonable value of the property).
- Negotiable and competitive interest rate.
- Ability to finance the VA funding fee (plus reduced funding fees with a down payment of at least 5 percent and exemption for veterans receiving VA compensation).
- VA rules limit the amount you can be charged for closing costs.
- Closing costs are comparable with other financing types (and may be lower).
- Closing costs may be paid by the seller. •No private mortgage insurance premiums are required.
- No private mortgage insurance premiums are required.
- An assumable mortgage.
- Right to prepay your mortgage without penalty.
- For homes inspected by VA during construction, a warranty from builder and assistance from VA to obtain cooperation of builder.
- VA assistance to veteran borrowers in default due to temporary financialdifficulty.
Eligibility for VA Home Loans
Am I qualified? If you are an active duty member, veteran, reserve or national guard member, and potentially a surviving spouse, you can apply for the VA home loan. There are varying requirements that a lender would be able to evaluate on a case by case basis to determine eligibility. Spouses of the military members who have died while on active duty can also be eligible for VA home loans.
How Much Can I borrow?
According to the VA there is “no maximum that an eligible veteran may borrow using a VA-guaranteed loan.” However, there are county limits that must be used to calculate the VA’s maximum guaranty amount for a particular county. There is no limit to how much you can spend on your new home with a VA loan, but the VA has limits on how much liability it will assume, which can affect the amount of money your lender will let you borrow.
Generally, eligible veterans or military personnel can get loans up to $417,000 with no money down. But that number can be much higher in certain counties that have a higher cost of living. Check the VA website for specific limits in your county.
How Can Veterans and Military Personnel get VA Loans?
Generally, eligible veterans or military personnel can get loans up to $417,000 with no money down. But that number can be much higher in certain counties that have a higher cost of living. Check the VA website for specific limits in your county.How Can Veterans and Military Personnel get VA Loans?
Veterans, active military personnel, and military families can follow these steps to get a VA loan:
- Make sure you are eligible for a VA loan. Check the VA website for a detailed list of eligibility requirements for military service members, veterans, and military spouses.
- Find a lender that participates in the VA home loan program.
- Get a Certificate of Eligibility from the VA to prove you are eligible for a VA loan.
- Apply for your VA loan. Your VA lender will work with you to complete the steps needed to finance your home.
Getting Approved for a VA Homes Loan
After determining eligibility and going through the necessary steps, your next goal is to get approved. In order to be approved the VA does have specific requirements that eligible people must meet. The applicant must have qualifying income, good credit standing, and meet the debt-to-credit ratio requirements. The home you are purchasing must be VA approved and must also be owner occupied. The requirements for a VA loan are typically more lenient than a conventional loan with better benefits and lower costs.
If you are an active duty service member or veteran and interested in home buying or want more information on the VA home loan contact Ashley Novak at 424.333.5340 or ashley(at)ashleynovakre(dotted)com.