As a veteran, you have access to many benefits, including the ability to purchase a home with no down payment. The Veterans Affairs (VA) Home Loan program is a great option for veterans who want to buy a home or refinance their current mortgage.
What is a VA home loan?
A VA home loan is a mortgage loan that is guaranteed by the U.S. Department of Veterans Affairs. This means that the VA will guarantee a portion of the loan, which allows lenders to offer more favorable terms to veterans. VA loans are available to active-duty service members, veterans, National Guard and Reserve members, and surviving spouses.
Who is eligible for a VA home loan?
To be eligible for a VA home loan, you must have served at least 90 consecutive days of active-duty service during wartime, or 181 days of active-duty service during peacetime. You may also qualify if you have served at least six years in the National Guard or Reserves, or if you are a surviving spouse of a service member who died in the line of duty.
What are the benefits of a VA home loan?
There are many benefits to using a VA home loan to purchase or refinance a home. One of the biggest benefits is that there is no down payment required, which can save veterans thousands of dollars. Additionally, VA loans typically have lower interest rates than conventional loans, which can save veterans money over the life of the loan.
Another benefit of a VA home loan is that there is no private mortgage insurance (PMI) required. PMI is typically required on conventional loans when the down payment is less than 20% of the purchase price. With a VA loan, veterans can avoid this extra expense.
How do I apply for a VA home loan?
To apply for a VA home loan, you will need to obtain a Certificate of Eligibility (COE) from the VA. You can apply for a COE online, through your lender, or by mail. Once you have your COE, you can apply for a VA loan through a participating lender.
When applying for a VA loan, you will need to provide documentation of your income, employment, and military service. Your lender will also review your credit history and may require a home appraisal.
Can I use a VA home loan to purchase a second home?
No, you cannot use a VA home loan to purchase a second home or investment property. VA loans are intended to help veterans purchase primary residences. However, you may be able to use a VA loan to purchase a multi-unit property, as long as you live in one of the units.
What types of properties can I purchase with a VA home loan?
VA loans can be used to purchase a variety of properties, including single-family homes, condominiums, townhouses, and manufactured homes. However, the property must meet certain minimum property requirements (MPRs) set by the VA. These requirements ensure that the property is safe, sanitary, and structurally sound.
Can I refinance my current mortgage with a VA loan?
Yes, veterans can refinance their current mortgage with a VA loan. The VA offers two types of refinance options: the Interest Rate Reduction Refinance Loan (IRRRL) and the Cash-Out Refinance Loan.
The IRRRL is a streamlined refinance option that allows veterans to refinance their current VA loan to obtain a lower interest rate. The Cash-Out Refinance Loan allows veterans to refinance their current mortgage and take out cash from the equity in their home.
What are the closing costs on a VA home loan?
Like any mortgage loan, there are closing costs associated with a VA home loan. However, the VA limits the amount that lenders can charge veterans in closing costs. Additionally, veterans may be able to negotiate with the seller to have some or all of the closing costs paid for by the seller.
How long does it take to close on a VA home loan?
The time it takes to close on a VA home loan can vary depending on the lender and the complexity of the transaction. However, on average, it takes about 30-45 days to close on a VA loan.
What happens if I can’t make my VA home loan payments?
If you are having trouble making your VA home loan payments, you should contact your lender as soon as possible. Your lender may be able to work with you to modify your loan or set up a repayment plan.
If you are unable to make your payments and your home is foreclosed on, the VA will guarantee a portion of the loan to the lender. However, you may still be responsible for any deficiency balance between the amount of the loan and the amount of the foreclosure sale.
What is the VA Funding Fee?
The VA Funding Fee is a one-time fee that is charged by the VA to help offset the cost of the loan program. The amount of the fee varies depending on the type of loan, the veteran’s military service status, and the amount of the down payment (if any).
The fee can be paid upfront or rolled into the loan amount. Veterans with service-connected disabilities are exempt from paying the funding fee.
What should I look for in a VA lender?
When choosing a lender for your VA home loan, there are several factors to consider. First, you should look for a lender who is approved by the VA to originate VA loans. You should also look for a lender who has experience working with veterans and understands the unique aspects of the VA loan program.
Additionally, you should compare interest rates, fees, and closing costs from multiple lenders to ensure that you are getting the best deal possible.
The VA home loan program is a great benefit for veterans who want to purchase a home or refinance their current mortgage. With no down payment required, lower interest rates, and no PMI, VA loans can save veterans thousands of dollars over the life of the loan. If you are a veteran and are interested in using a VA loan to purchase or refinance a home, contact a participating lender today.